Talk (about fiscal policy) Is Cheap

Paul Krugman makes an interesting observation about Germany’s fiscal rhetoric and policy:

there’s a dissonance between what Germany says and what it does: the Finance minister denounces Keynesianism, but at least according to the IMF Germany’s actual stimulus package is quite substantial

In other words, the Finance minister may be silly enough to advocate fiscal restraint during a recession but at least their actual policies avoided Herbert Hoover economics. In our country, the Republicans are also advocating Herbert Hoover economics but we are lucky enough to have smarter heads running fiscal policy today.

But consider this – Republicans also say they are for long-run fiscal restraint, which might be a very good thing if we actually had been practicing it for the past 28 years. Also, Republican led governments pushed fiscal irresponsibility over this period.