Paul Krugman Professor of Economics and International Affairs Woodrow Wilson School / Princeton University Princeton, NJ 08544-1013

May 28, 2012

Subject: Your Friday May 11, 2012 New York Times Editorial Titled Easy Useless Economics I agree that we need to continue to use deficit spending to help the unemployed. The downside is that this enables our Morally Corrupt Politicians who have been winning votes by increasing deficit spending. My research indicates that the event triggering this moral corruption was the frugality of President Gerald Ford. Ford initially refused to bail out the non-frugal Politicians who were forcing New York City into bankruptcy. Ford subsequently lost the election to Jimmy Carter which demonstrated to our Political Parties that the best way to win American Votes is to make frugality seem unnecessary. Morally Corrupt Politicians also confirmed that American Voters would continue to condone depraved behavior (Smear, Hypocrisy, Outlandish claims, and Deception). The timing of this is trigger can be illustrated by preparing an Illusion of Prosperity Graph. Our Federal Reserve expanded the Illusion by allowing non-frugal banking practices. This Illusion encouraged Americans to have more children. This in turn required further growth of the Illusion to prevent losing votes from excessive unemployment. Morally Corrupt Politicians use non-frugal deficit spending to win votes from Americans affected by the following actions: (1) Department of War spending. (4) Health Care spending. (2) Tax breaks, grants, and subsidies for businesses. (5) Grants to our High Schools and Universities. (3) Tax breaks to allow the wealthy to become wealthier. (6) Grants to our State and Municipal Governments. I recommend we reduce deficit spending on these six Items. Deficit spending has also been used to make up for the lending losses resulting from the non-frugal banking practices that created the 2008 financial crisis. Our Federal Reserve needs training in frugal banking practices. My recommendations for reducing our unemployment are: (1) Reduce our birth rate to a value commensurate with the following analytical parameters: (a) Our continued development of advanced technology for labor saving devices. (b) Excessive outsourcing of jobs to other nations. (c) Our employment standard of a 40-hr work week. This analysis would begin in 1975 when our imports first exceeded our exports and our birth rate had declined to 3.5 million births per year. The commensurate value for 2012 would be 2.8 million births per year. Our current birth rate of 4.0 million births per year would need to be gradually reduced by approximately 30%. (2) Create new jobs by downsizing our employment standard to a 30-hr work week. Since our baby boomers will be concerned about their retirement we need to strengthen Americas Pension Fund -- our Social Security Trust Fund. This will replace the current lunacy of asking unsophisticated Americans to make their retirement dependent on private savings accounts where they pay money managers to speculate on stock prices. In 2010 our Morally Corrupt Politicians began weakening Americas Pension Fund and called it a Payroll Tax Holiday. My research indicates our long-run structural policy fix should focus on increased oversight of our Criminally Dysfunctional Political System. The fixes include Term Limits, Licensed Politicians, and a Political Party Code of Conduct that prohibits depraved behavior. To make the fixes happen we need to require semesters of Political Oversight in our High Schools and Universities. Additional information is available on the Internet at scribd/6115oversight. Michael F. Patterson 6115 Fairlane Drive Clarence Center, NY 14032 Cc: Andrea Kimbriel, The Clarence Bee Angela Merkel, c/o German Embassy Francois Hollande, c/o French Embassy Andrew Rosenthal, NY Times Prof. Jeffrey Sachs, Columbia University John Steele Gordon, Author Prof. Roger Meiners, University of Texas Melanie Sloan, Executive Director, CREW Raghuram Rajan, University of Chicago Dr. Satish K. Tripathi, SUNY at Buffalo Prof. Silvio Laccetti, Rutgers University Ben Bernanke, Federal Reserve Board of Governors Justice John Roberts Jr., U.S. Supreme Court Elisabeth MacNamara, President, League of Women Voters David M. Walker, Comeback America Initiative Stephen Levitt, Greatest Good Jeff Simon, The Buffalo News Prof. John Taylor, Stanford University Prof. Peter Diamond, MIT