What Happened To “The Multiplier”?

Yahoo news seems to have made itself into a useful conduit for administration trial balloons and spin. Here’s a top story now: Obama plans to slash deficit in half.

Hold on. What? Cut the deficit?

Why?

I thought we were all Keynesians now! I thought it had been proved beyond a shadow of a doubt that Keynes was in fact correct in his ultrascientific macroeconomic theories, rather than wrong and antiquated and steeped in 1930s-1950s thinking that served Britain oh so well in its socialism.

Remember?

After all, as we all now agree, there’s such a thing as a “multiplier”! (And it’s not a phony oversimplification at all.) And this multiplier has been tested and measured and it’s greater than one. Always. In English this means that the more money the government spends, the richer we all get. Which is one of the most scientific concepts I’ve ever heard of! (Because Keynesianism is, as I’ve said and wish to reiterate without any sarcasm whatsoever, totally scientific.)

But so then if the “multiplier” is bigger than 1, why would we ever want to reduce the deficit? Deficits are great. The bigger the deficit, the more money the government is spending (which is good!) relative to revenues. Reducing the deficit is bad according to Keynesianism.

That’s what we all supposedly now believe, because it was supposedly proven in September of last year, when the crisis spiked, conveniently right before the election!

What gives?

Ok, let me just read the article….oh wait, what’s this?:

The official … said the deficit will be shrunk by scaling back Iraq war spending, ending the temporary tax breaks enacted by the Bush administration for those making $250,000 or more a year, and streamlining government.

Oh. Oh I see. Oh yes I get it now.

Here’s another way this article could have been headlined:

“Obama plans to scale back Iraq war funding.” (But why? What about the “multiplier”? Spend spend spend, the more the better. Spending on the Iraq war = jobs for munitions factory workers and the like. Right?)

Or: “Obama plans to raise taxes on the high tax bracket.”

Or: “Obama plans to ‘streamline government’”, except “streamlining government” is a bogusly vague concept they tossed in there that doesn’t really mean anything.

Anyway, all this really proves is that – just as nobody really cares about “the deficit” when they find spending they like – it also seems that none of these newly-spun Keynesians really believe in “the multiplier” when they find spending they don’t.

P.S. Notice how once again we are treated to the “words=deeds” thinking of the Obama administration. A whole news story gets spun out of the (meaningless) fact that Obama “plans to” cut the deficit in half. Will he actually do it, in practice? Does anyone really believe that? Doesn’t matter! He “plans to”. Good enough for me.

Or at least, for most people.