Photo: Bloomberg TV
Nobel prize winning economist Paul Krugman has argued that the government should ramp up deficit spending in order to avoid a full-on depression.However, Krugman is not without his critics.
Brian Wesbury, Chief Economist of First Trust Advisors was on Bloomberg Surveillance with Tom Keene this morning to make his anti-Krugman case.
“What does Dr. Krugman Get wrong,” asked Keene.
“If government spending actually created wealth – if it was true, if Paul Krugman was right – then there shouldn’t be one person in poverty anywhere in the world,” said Wesbury. “Every economy should be growing at 4% with 4% unemployment. But it’s not true.”
“Every dime the government spends, it has to get it from the private sector. And so the bigger the government sector is, the smaller the private sector.”
“Somebody has to spend more than their income, and, for the time being, that has to be the government,” said Krugman to Business Insider‘s Joe Weisenthal.
Krugman believes that the time to cut back is when the economy is healthy and growing.
UPDATE: Paul Krugman fired back at Wesbury.