Tuesday, March 6, 2012

My letter to the NY Times re: Private Purchasing Power Remaining

From: patrickbarron@msn.com
To: letters@nytimes.com
Subject: Private Purchasing Power Remaining
Date: Tue, 6 Mar 2012 09:47:42 -0500

Re: States of Depression, by Paul Krugman

Dear Sirs:
Paul Krugman's recent Op Ed "States of Depression" perfectly illustrates the Keynesian view that "lack of demand" is what ails the U.S. economy and, if private individuals will not throw their hard earned dollars at questionable projects in their attempt to rebuild the capital base plundered by government, then the states must do it for them. An alternative view is that of Murray N. Rothbard as first explained in America's Great Depression. Only the private economy produces capital, upon which rests the productive capacity of the nation. All government spending consumes capital or restricts its formation. Rothbard called the wealth generating sector of the economy "Private Purchasing Power Remaining" (PPPR). Krugman himself admits that massive government spending has done little to help the nation out of its crisis. Perhaps it is time to give Rothbard's solution a chance. It worked in 1920/21 in curing the "Great Depression that nobody knows".


Patrick Barron

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