Wednesday, June 30, 2010

Malkiel's Advocacy of Global Entitlement Reform As A Counterpoint To Krugman

Early this month, Princeton economics professor and one-time financial markets savant Burton Malkiel wrote an editorial in the Wall Street Journal, Entitlement Reform and the Global Budget Crisis.

In contrast to Paul Krugman's recent cries of despair that anybody should throttle back any governmental spending, Malkiel argued for serious reform of expensive social entitlement programs, such as Social Security, in order to cut government deficits and calm financial markets.

Granted, Malkiel didn't expressly recommend cutting current spending budgets. But his tone and attitude were clearly in favor of a "return to fiscal sanity," as he put it.

More specifically, though Malkiel counseled against growing federal budget deficits and unsustainable spending.

In the final analysis, a dollar spent is a dollar spent, so Malkiel's advice for global social pension reforms would seem to be at odds with Krugman's desire for full-tilt spending by governments around the globe.

Pretty interesting contrast of approaches, isn't it?

No comments: