Thursday letters: Krugman wrong about U.S. debt
My Democratic friends are enamored of Princeton’s Paul Krugman, a Nobel Prize winner in economics who believes some are too concerned about America’s nearly $18.2 trillion national debt. He relishes pointing out that America’s ratio of debt to gross domestic product is not as elevated as some European countries. True enough.
My philosophy of science professor in graduate school was Elinor Ostrom, the only woman ever to win the Nobel Prize in economics. Lin, as she had us call her, was a political economist, in contrast to Krugman and most Nobel winners, who are pure, or only, economists. Lin insisted that we examine the political context of whatever economic variables we studied.
Krugman’s notion that America’s debt-to-GDP ratio is not so bad ignores the fact that, standing alone, the gross domestic product means practically nothing. The ratio is wholly dependent on the accessibility of public moneys, and the gridlock within the American government makes it difficult to increase revenues to float America’s sinking fiscal ship. Republicans and Democrats can share credit here. What good is having a stash in your safe if you’ve forgotten the combination?
In short, wholly apart from America’s aging population and the someday rising interest rates, Professor Krugman’s comparison of the United States with Europe shouldn’t fool anybody. He rarely speaks of China, the comparison of its debt ratio to ours being nothing short of frightening. And China is abandoning the one-child policy. As a visiting professor at the University of Peking in 1994, and again in 1997, I learned that the Chinese have one quality above all others: patience.
William Kreml
USC professor emeritus,
political science
Columbia
This story was originally published April 22, 2015 at 7:30 PM with the headline "Thursday letters: Krugman wrong about U.S. debt."