There's a real Morning in America vibe among economic observers right now 1/ nytimes.com/2021/03/13/ups…
Surveys of forecasters are very upbeat after the passage of the American Rescue Plan 2/ bloomberg.com/news/articles/…
This comes after predictions of disaster from the Trumpists. (Yes, I made a bad call when Trump won in 2016; I retracted it and apologized three days later). So what will they do? We already know the answer: they'll do what they did in the 1990s 3/
There were universal declarations on the right that Bill Clinton would be an economic disaster 4/ archive.thinkprogress.org/flashback-in-1…
When he presided over a boom instead, the same people insisted that all the credit belonged to ... Reagan, who cut taxes many years earlier 5/ archive.nytimes.com/www.nytimes.co…
You can already see this in microcosm, with Trumpists, whose plan for vaccinations was to dump the problem on the states, now trying to claim credit for Biden's impressive rollout 6/ talkingpointsmemo.com/news/trump-cov…
So you can save time in your newsreading. If you want to know GOP reactions to whatever happens over the next 4 years: if it's bad, it's Biden's fault, if it's good, Trump gets the credit 7/

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More from @paulkrugman

14 Mar
Private-sector economic forecasters — who are, in practice, very Keynesian — are incredibly optimistic. GS is predicting full Morning in America growth 1/ Image
This may look like a prediction of inflationary overheating, but actually not so much. GS believes we have a 6% output gap, with potential growing ~2% a year. So 8 percent growth only brings us roughly back to capacity by end 2021 2/
And with most of the stimulus behind us, slower growth in 2022 and after. Other forecasts have smaller output gap but also slower growth, so again no major overheating. The overall picture looks like this Brookings chart 3/ Image
Read 4 tweets
12 Mar
I just debated Larry Summers, again, over overheating and all that, for Fareed Zakaria. Not going to try and spin it; watch for yourself. Also, debating people who are neither idiots nor political hacks is weird, and will take getting used to. But I do have some meta thoughts 1/
You still sometimes hear economists, even those with a public intellectual role, say that their job starts and ends with giving the best possible policy advice; it's up to politicians what they do with it. But in America 2021 that's not a sustainable position 2/
In fact it's not sustainable even if good policy is all you care about, because we have so much polarization and so many political figures acting in bad faith that it's irresponsible not to consider the political implications of your recommendations 3/
Read 7 tweets
12 Mar
I agree with a lot of what David Brooks says here (a sign that the apocalypse is nigh?), but really wish we could kill the zombie myth that Reagan saved the economy 1/ nytimes.com/2021/03/11/opi…
Inflation didn't fall because Reagan reined in big government; it fell because Paul Volcker hit the economy with an enormous hammer 2/
The great productivity slowdown of the early 1970s didn't end under Reagan. To the extent there was any revival, it took place from 1995-2005 3/
Read 5 tweets
5 Mar
Kind of buried by the Covid bill, but in a few days we'll probably start hearing more about CBO's long-term budget projections, which will have fiscal scolds fulminating 1/ cbo.gov/publication/57…
The debt projections look big, for those worried about that kind of thing 2/
But it will be important to understand what's driving those projections. Some of it is entitlement spending, but mostly it's projected interest payments (I start from 2024, after the Covid bulge is over) 3/
Read 7 tweets
4 Mar
As the Senate begins debate on the Biden relief bill, let me remind everyone of three crucial facts:

1. The bill is imperfect — because all legislation is imperfect

2. Nonetheless, it's very, very good

3. The clock is ticking 1/
On (1), sure, you can argue that some aid recipients don't need the money as badly as others. An idealized bill would target aid more accurately on families, local governments etc hurt worst by the pandemic. But so what? 2/
The great bulk of the proposed outlays will go to extremely worthy causes — shots in arms, reopened schools, sustaining the unemployed, avoiding cuts in crucial services, and more. Compared with real-world bills of the past, this one is amazingly good 3/
Read 6 tweets
3 Mar
Politics aside, this report on young people moving TO New York bc of lower rents — a sort of partial de-gentrification — is interesting and, I think, hopeful 1/ bloomberg.com/news/articles/…
It reminded me of an old but very good paper by Glaeser and Gyourko on urban decline, pointing out that durable housing acts as a kind of cushion 2/ repository.upenn.edu/cgi/viewconten…
Even if the Covid shock were much worse than seems likely, dystopian fantasies about big cities weren't likely 3/
Read 4 tweets

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