What's Krugman's Problem?
Just after the election, America’s hysterian, Paul Krugman, promised to leave us alone while he came to grips with an especially bruising defeat–Krugman, in the inner recesses of his limited mind, believed the election was a referendum on . . . him. Anyway, his sabbatical didn’t last long. He published two op-ed pieces in the New York Times this week, both railing against partial privatization of Social Security.
His argument? There is no Social Security crisis. Everything’s fine; won’t you pass the broccoli, dear?
Yes, the same Krugman who, in 1996, predicted the collapse of Western Civilization under the weight of Boomer retirements, now says we are crisis-free until 2052, when a mere quadrupling of individual income taxes will solve the problem.
Krugman is especially hard on the stock market. According to his economical models, you see, the stock market always returns a loss, while government bonds always return a gain. He’s correct that if individuals used all of their discretionary social security investment money to buy government bonds, the net would be zero. But only an idiot would assume that diversifying the social security trust fund and applying a little dollar-cost averaging would reduce its value over 40 years.
There are two sure investments in America: homes and stocks. Yes, you can buy a lousy home or a lousy stock. But if you buy a hundred homes or a hundred stocks, chances are you’ll come out way ahead twenty years hence.
Mr. Krugman would be well advised to return to his vacation cottage in the woods of Connecticut, whereto whittle away the hours counting his returns on t-bills.
Krugman’s latest eruption is here.
The NRO Krugman Truth Squad response is here.