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14 Feb, 4 tweets, 2 min read
The next time someone tells you that the parties are the same, or worse, that the GOP represents the working class, compare the distributional impact of Trump's main economic policy and Biden's (so far) 1/
Here's the Tax Policy Center estimate for the Trump tax cut (in 2018) 2/ taxpolicycenter.org/publications/d…
And here's TPC on the American Rescue Plan 2/ taxpolicycenter.org/taxvox/tpc-fin…
One party is trying, however imperfectly, to address inequality; the other is trying to increase it 4/

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Paul Krugman Profile picture
10 Feb
Exactly right. And important to say given the controversy. 1/
Also important to realize that the data suggest that "fuell employment" as conventionally estimated ... isn't 2/
Quick and dirty comparison of CBO "output gaps" with inflation. Suggests that economy can run maybe 1.5% above "full employment" with only 2% inflation, and ... 3/
Read 4 tweets
Paul Krugman Profile picture
7 Feb
My long form defense of going big on pandemic rescue. IT'S NOT ABOUT STIMULUS. It's like fighting a war (on pandemic fallout.) And you spend what you need to win a war, not just enough to close the output gap 1/ nytimes.com/2021/02/07/opi…
Fear of inflation are greatly exaggerated: the economy can probably run hotter than CBO thinks, the multipliers on a lot of the spending probably aren't that high, and the Fed is well able to contain inflation if it becomes a problem 2/
And the idea that we need to save fiscal ammunition for future programs is completely backwards. Remember 2009! The constraint is political, not financial; what we need is a program that delivers tangible benefits to voters, showing them that govt can do good. 3/
Read 4 tweets
Paul Krugman Profile picture
6 Feb
So is the Biden plan too big? We need to be clear about what it's for. IT'S NOT STIMULUS. This isn't at all like the ARRA, which was all about boosting demand; this is disaster relief. Or maybe it will help if we think of it as being like fighting a war against Covid fallout 1/
When you're budgeting for a war, you don't decide how much to spend by estimating what it would take to fill the output gap; you estimate what it would take to win the war. 2/
Is everything in the Biden plan well-targeted on our needs? No. But the controversial part, checks to most of the population, is just a fraction of the plan 3/
Read 8 tweets
Paul Krugman Profile picture
5 Feb
Lots of people are dunking on Larry Summers today, and in my view rightly so; this piece by Jordan Weissman seems especially on point. Yes, a rescue package this size could lead to overheating, but how bad is that? 1/ slate.com/business/2021/…
I mean, suppose that the Fed ends up hiking rates because unemployment is 3.2% and the economy is growing at 8%. Would that be so bad? But while I don't think Summers is being helpful, the fact that he is weighing in like this says some good things about Democrats 2/
As Kevin Drum pointed out long ago, there's a "hack gap" between the parties: even Republicans who should know better fall in line to back the party line, as economists did for the 2017 tax cut. Democrats, not so much 3/
Read 6 tweets
Paul Krugman Profile picture
31 Jan
So Rs want Biden to drastically scale back economic relief in the name of bipartisanship. Their offer is insultingly inadequate, and their claims that using reconciliation would "poison the well" are rich given how they rammed through the 2017 tax cut. But there's more 1/
Why, exactly, is bipartisanship something to be valued right now? When a political party by and large still won't accept Biden's legitimacy and embraces Jewish space laser people, why is it a virtue to cooperate with it? 2/
Also, the major items in the Biden proposal are very popular, generally with >60% approval. Why defer to a party that is lockstep opposed to what the public wants? 3/
Read 5 tweets
Paul Krugman Profile picture
29 Jan
Playing my tiny violin. But this stuff is more important than many may realize. To understand why, you have to understand that the foot soldiers of the right come in two main flavors; bullies and apparatchiks. 1/ nytimes.com/2021/01/29/us/…
The bullies want to beat people up — but most will only do it if they don't expect personal consequences. That's probably why the feared wave of violence around the Biden inauguration didn't happen: the 1/6 rioters were shocked to realize they might actually face arrest 2/
The apparatchiks are happy to undermine democracy if it's good for their career. It's a rude shock finding that Trump White House on your resume actually hurts your prospects 3/
Read 6 tweets

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