From the “if only life were like this” files
by digby
Yesterday I wrote about Tom Coburn calling out Paul Krugman in his interview with Ezra:
You’ll especially enjoy the anecdote about Krugman in which Coburn says he’s all wet about austerity because Sweden is doing well. Ezra was pretty tart in his response, but I so hope the good professor responds.
I learn from Ezra Klein’s interview with Tom Coburn that Sweden, of all places, has become the new right-wing icon. I thought Europe’s woes were all about collapsing welfare states? But anyway, the story now is that Sweden has slashed spending and cut taxes, and is doing great; supply-side economics vindicated!
Ezra points out, rightly, that Sweden has actually benefited a lot from very aggressive monetary policy — one of the original Princeton zero-lower-bound Group of Four, Lars Svensson, is now deputy governor of the Riksbank. (The others were Mike Woodford, yours truly, and a fellow by the name of Ben Bernanke).
But Ezra didn’t challenge Coburn on the claim about spending cuts; why don’t we look at what Sweden has actually done, as opposed to the official right-wing line? Look, in particular, at actual government consumption — purchases of stuff. Here’s Sweden versus the United States, from Eurostat:
Somebody has been practicing harsh spending-side austerity — and it’s not Sweden.
Maybe the president just wanted to prove his austerian bonafides to his pal Coburn when he tweeted this today:
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