Nobel Prize winning economist Paul Krugman is critical of the Keystone Pipeline, and does not believe it will replace the jobs lost when government spending spending was sharply curtailed during the fiscal cliff debate.
Krugman raised the question why talk of the Keystone pipeline when there is such an oversupply of oil that prices are being driven down and are hurting oil companies. The answer from Republicans, according to the left-leaning economist, is that it will create jobs, but Krugman’s thesis is the number of jobs it will create won’t compensate for those that were lost in budgetary cuts. He thinks draconian measures in an economic climate of low demand was a mistake, and drove up unemployment rates. He cites the Congressional Budget Office, that estimated 900, 000 jobs would have been lost with sequester of the House Republicans had gotten their way by pushing the country into default.
However, when it comes to military spending, Krugman continued, then many politicians realize that spending does create jobs. Krugman cites former Representative Barney Frank who called this “weaponized Keynesianism.” Krugman said Keystone is a “Carbon Keynesianism, ” with those who support the Keystone pipeline. While it could create 42, 000 jobs during the construction phase, only a small fraction of that would be needed to run the pipeline once it is built. Krugman called the Keystone pipeline, “A Sick Joke.”