Shorter Paul Krugman

by Pejman Yousefzadeh on August 15, 2011

“Let’s have a war! The resulting military draft will do wonders in taking care of the unemployment problem.”

Okay, I admit that is something of an overstatement of Krugman’s position. But not by much. Maybe we can just let Hayek respond:

KEYNES:

We could have done better if we’d only spent more. Too bad that only happens when there’s a world war. You can carp all you want about stats and regression. Do you deny that world war cut short the Depression?

HAYEK:

Wow. One data point and you’re jumping for joy. The last time I checked wars only destroy. There was no multiplier. Consumption just shank as we used scarce resources for every new tank. Pretty perverse to call that prosperity. Ration meat. Ration butter. A life of austerity. When that war spending ended, your friends cried disaster. Yet the economy thrived and grew faster.

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