It appears that, for all intents and purposes, the Scarborough v Krugman debate has devolved into a pundit parody-version of Celebrity Deathmatch — that claymation show in the aughts that pitted popular caricatures in cage matches that often resulted in gruesome endings. In the left corner you have a Nobel-Prize winning economist and columnist Paul Krugman, whose blog at The New York Times is often used to target critically those who conjecture on subjects of economics. In the right corner you have attorney and former U.S. Representative Joe Scarborough, now host of MSNBC’s “Morning Joe,” who often portrays the conservative moderate that’s willing to take on his own party. For the sake of brevity I won’t go into all the details of the two week old disagreement (it pretty much all started here). I’ve previously discussed this subject through the lens of ideology and morality, but this will be a bit more straightforward.
Of course this broil won’t result in a sensationalized clay death, but there is another facet of the broader subject-matter — which is the problem of our long-term debt, a problem that is in particular a health care issue — that’s getting the proverbial wrench in the head now that Joe has devolved into tweeting things like this:
Now Joe nominally represents, believe it or not, a rather sensible view by D.C. standards that a proper policy course of action would be short-term stimulus paired with a plan for long-term deficit and debt reduction. Of course he’s spent no time or column space that I’ve seen on how we could stimulate the economy right now, as it appears mainly as rebuttal that he’s different and sensible. Krugman had countered on that “Morning Joe” appearance that the most important problem facing America wasn’t health care costs in 2025, but too-high unemployment and weak economic growth right now. Which isn’t, contra Scarborough’s headlines, a denial of the future per se but more a pragmatic assumption about the ability of Washington to focus on more than one thing. It is not without some irony that Joe has spent the last two weeks proving Krugman correct in that regard.
Joe’s argument since then has hinged on two factors, both of which play well to his centrist-right image: Hearsay (part of the ideological box I wrote of earlier) and an appeal to authority. Yet even his citation of authority is faulty, as Matthew O’Brien writes:
In other words, Scarborough can’t believe Krugman says we can wait until Medicare spending is a problem before doing more about it. Of course, the arithmophobic Scarborough can’t explain why Krugman is wrong — aside from saying everybody he talks to thinks so too — which is why Scarborough outsourced the job to the senior economist at the RAND corporation. But, unfortunately for Scarborough, he seems to have found an economist who doesn’t know much about the subject — at least judging from the freshman-level errors throughout.
Even so I think Derek Thompson over at the Atlantic has the better perspective, describing the spate as personifying the dichotomy between “(a) what we know about the economy and (b) what we think we know about the economy” which can also be read about what we know about the debt and what we think we know about the debt. Thompson writes (various emphasis mine):
And here are four things we know about our debt. We know that government borrowing rates are low. We know that global appetite for our debt is high. We know we borrow in our own currency, and not, like Europe, in a common currency that we don’t control. And we know that makes us less vulnerable (but not invincible) from a debt crisis. Out of these ten things we know, how many of them suggest that we should cut our deficits today? Basically, zero. And that’s Paul Krugman’s point. Everything we know about the economy today provides a clear argument for elevated deficits.
Here are four things we think we know about our future debt — which is almost entirely a health care spending problem. We think we know that the cost of caring for Americans will continue to grow faster than the economy. We think we know that demand for this increasingly expensive care will grow along with our aging boomer population. We think we know that tax revenue will grow about in line with the economy. Thus, we think we know what the gap between future taxes and future spending will be, and how much we have to start saving today to cover it. It’s possible that the deficit hawks have it 100 percent right. But it would also take a rather astonishing clairvoyance for anybody to foresee the next ten years with even slightly useful clarity.
Essentially the economist’s perspective emanates from what we know about the present and recent trends put towards a policy prescription for the present and immediate future. The cable-show pundit sees lines on a graph (which, to be honest, kudos to him for even bothering to look at a graph) that look awfully scary but as a practical matter becomes less useful the further into the future such lines go.
One could also characterize this as a twelve-month problem versus a twelve-year problem. Irrespective of Joe’s insistence at creating a straw man argument out of Krugman’s words (including an attempt to call Krugman the “Wayne LaPierre of debt“) the two problems are not unrelated — the former’s math is rather critical to latter. Rather simply put, if we could get the economy to grow faster and employment to rise more quickly then our math begins to look better. As we get closer to that feared 2025 date we’d have a clearer picture of health care cost growth trends and the effects of the Affordable Care Act.
Scarborough and other Very Serious People should, theoretically, understand this intuitive path. Instead he continues to call for measures that actually puts him more in line with Democratic leadership, including ideas like raising the Medicare eligibility age and fiddling with Social Security right now. These are the actions of a man whose obsession with debt and centrist consensus leaves him rather defenseless against people who know what they’re talking about and sorely regrets it later — not unlike his post-election admission that “he thought Romney was beating Obama, because Romney was drawing massive crowds.” Why did he think so? Because, as he explained, “Mark Halperin called me and said, ‘I’ve never seen anything like it!’” If Scarborough was really interested in our long-term funding problems he would be cutting promos for MSNBC calling for the Independent Payment Advisory Board to be staffed and Accountable Care Organizations and physician payment reform incentives to be broadened. Instead we’re getting a VSP cheerleader that’s trying to prove he “flummoxed Krugman.”