More right wing entertainment from John Stossel

The fact that this man still has a job is amazing. Appears his latest bit of wisdom is to ring in a new great Depression.

John Stossel: Federal deficit is cause for worry
First he gets history wrong in regards to the lessons from the Great Depression:

Of course, neither was able to fix the economy. On the contrary, their policies made a depression the Great Depression, extending it many years and even generating a depression within a depression in 1937.

But Krugman and others suggest that since the New Deal ran moderate deficits and the Depression persisted, then Roosevelt should have run bigger multiyear deficits -- and so should Obama.

This is the wrong lesson to learn from the 1930s. The New Deal didn't fail because its deficits were too small. As Amity Shlaes shows in her book "The Forgotten Man," the New Deal failed because it interfered with the market's natural regenerative processes. By raising taxes, hamstringing producers with arbitrary regulations and creating uncertainly about what the government would do next, business people were unwilling to invest and hire workers.

I'll let krugman set the record straight.

And then Stossel goes on to say that Government spending will increase the problem and that deficits should be the big worry right now:

The 2009 deficit is projected to be $438 billion. Obama's "stimulus" could take it up to a trillion and beyond. That's just the beginning since the Democratic Congress' spending wish list and Medicare's $35 trillion unfunded liability loom.

We should all worry about the deficit.

I'll outsource to an economist for this one, Dean Baker from CEPR:

there is nothing that the economy needs more right now than very large deficits. The collapse of the housing bubble has destroyed more than $5tn in wealth. The fallout from this collapse has led to an even larger decline in stock market wealth. This massive loss in wealth in turn is leading to a plunge in consumption that is driving the economy into the most serious downturn since the Great Depression.

Economists from across the political spectrum agree that the only way to counteract this loss of consumption demand is through large increases in government spending.

If Stossel was really worried about Medicare's liability he'd be talking about health care reform because the health care crisis is going to be hitting the private sector in a major way. If you are worried about the recession turning into a depression government spending is exactly what you want. If you are worried about long term deficits health care reform is what you want.

Stossel is either lying or uneducated. I'm not a mind reader so I can't tell you which.