There's no shortage of ideas on how to help the faltering economy, but Nobel Prize winning economist and New York Times columnist Paul Krugman has come up with what has to be the oddest suggestion yet: Fake a looming invasion from outer space. In an interview with CNN, Krugman cited "a Twilight Zone episode in which scientists fake an alien threat in order to achieve world peace. Well, this time... we'd need it in order to get some fiscal stimulus." According to Krugman's tossed-off theory, we'd need a massive buildup to counter the apparently looming invasion. "[If] inflation and budget deficits took secondary place to that, this slump would be over in 18 months." (Watch the video below). Valid hypothesis... or just plain silly?
Sounds daffy, but Krugman is right: "If this fear of an alien invasion prompted the government to spend, say, $1 trillion on telescopes and lasers," says Joe Weisenthal at Business Insider, that would improve the bottom lines of American businesses by $1 trillion, if nothing else. It would obviously be wiser to spend the money more usefully, by fixing clogged airports and crumbling bridges. "But that would take political will that we don't have."
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This argument is based on a fallacy: Krugman's theory hinges on his "canard about how World War II dragged us out of the Great Depression," says Justin Raimondo at Antiwar. The trouble is, that theory has been "debunked by economists on both the right and the left." It wasn't war-time spending that sparked the postwar boom — it was the return to normalcy after years of privation and rationing, and the role our unscathed industries played in rebuilding the ruins overseas.
Wasting money won't save the economy: What Krugman neglects to mention, says Ed Morrissey at Hot Air, is that under the scenario he envisions we'd be seizing a fortune from taxpayers and blowing it on a bunch of gadgets "which have a real value of zero," since the proposed "invasion" is a scam. Government spending like that "doesn't create economic growth; it takes money from actual production," and that's the last thing this economy needs.
Here's what Krugman said:
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