BrianGarst.com

We don’t need to fear turning America into France by passing ObamaCare, says Paul Krugman in a recent column. After all, European welfare state economies are doing great!  What’s his proof?  Just trust your eyes!

Actually, Europe’s economic success should be obvious even without statistics. For those Americans who have visited Paris: did it look poor and backward? What about Frankfurt or London? You should always bear in mind that when the question is which to believe — official economic statistics or your own lying eyes — the eyes have it.

What Krugman doesn’t say is that none of these European welfare states actually got their wealth by being welfare states. They got wealthy the way all countries do: through liberal markets and free trade. They then built massive welfare states on top of already wealthy societies. And lo and behold, when they did that their growth rates dropped significantly. They trade away higher future levels of prosperity for the illusion of present day security. That seems like an ok trade when it’s first made, but as more and more time passes, the difference between what people have and what they could have had with a more dynamic economy renders it a bum deal. And that’s before getting into arguments about the inherent instability in large, bureaucratic government and centrally planned societies.

Krugman does later provide some manner of statistical support for his apparent contention that there are no economic trade-offs (that’s his theme these days: no costs for implementing the radical agenda!) for instituting a cradle-to-grave nanny state, but Greg Mankiw’s numbers are better.

free trade Paul Krugman