Un gros, petit canard by the name of Alexandre Adler took to the pages of L’Opinion to rail against Paul Krugman disputing Standard and Poor’s decision to downgrade the credit rating of France, a stance which made headlines in Le Monde. And the column in question seems fairly straightforward, and draws upon recent events in the United States to offer guidance: “fiscal scolds don’t really care about deficits. Instead, they’re using debt fears to advance an ideological agenda.”
Don’t believe me? Look at Business Insider: “the CBO expects the deficit to fall to 2.1% of GDP in 2015.” Then compare that with a collection of quotes from Media Matters. Combine the two and it feels a bit like the argument against same-sex marriage: all that’s left is the fact that some people don’t like spending money, and that’s a silly position to take. (In the analogy, I’m referencing the argument in California’s Prop 8 case, which boiled the case against same-sex marriage down to a concern for the future propagation of the species. (I guess getting the population of the planet to 7.04 billion really has some people worried about our ability to reproduce.))
Krugman continues: “Meanwhile, French fiscal prospects look distinctly nonalarming. The budget deficit has fallen sharply since 2010, and the International Monetary Fund expects the ratio of debt to G.D.P. to be roughly stable over the next five years … But France has a higher birthrate than most of Europe … so that its demographic projections are much better than those of its neighbors, Germany included. Meanwhile, France’s remarkable health care system, which delivers high quality at low cost, is going to be a big fiscal advantage looking forward.”
This doesn’t sit well with Adler, who wonders out loud whether or not Tea Party violence or a bit of unexpected sun affected Krugman’s brain, “frappé le cerveau,” etc. Why? Because Krugman is a Keynesian, evidently. A dreaded Keynesian. And the pull-your-hair-out-in-frustration bit where a UMass student noticed that Carmen Reinhart and Kenneth Rogoff — advocates for austerity whose work has been cited by governments around the world — found that the data the two had used was wrong? That was just “malchance fortuite,” as in, a bit of fortuitous luck. And Adler is right: getting math wrong doesn’t prove anything. It’s one reason why I’m convinced Twitter’s stock listing on the Nasdaq is going to hit 5,000 and then start physically manifesting itself in the form of shetland ponies. You may say I’m crazy — that I’m throwing away my money like it’s ticker tape in search of an astronaut (like a school of fish beneath the sea) — but Adler is right: getting the math wrong doesn’t mean I’m wrong.
The one bit of data Adler advances — that hitting 100% debt-to-GDP means a reduction in spending — is something of a false canard, too. One: governments are capable of running deficits. Governments have run deficits in the past and they will do so once again in the future. I’m not writing this to encourage fiscal irresponsibility, but it happens. Two: France’s public debt as a percentage of GDP is at 89.9%. Their government’s gross debt as a percentage of GDP is at 90.291%. Given the size of what happened in 2008, this shouldn’t be unexpected. But the IMF suggests a stable outlook for the next five years based on currently existing policy. If the birthrate suggests that those born in France will stay in France, there will be a larger tax base in the years ahead. Debt has fallen since 2010. So how much to cut is too much for the man running around with scissors in the street? How many more pensions should be raided a la Cyprus? A la Greece? A la Portugal? How many youths shall we try and pull the ladder up on?
Unfortunately, Adler then decides to tack towards the personal and seems to suggest that Krugman became intellectually erratic when Larry Summers and Rick Rubin didn’t let him join the Clinton administration. He ends by calling him a charlatan and comparing him to Trofim Lysenko.
He doesn’t use any data, though.