Paul Krugman

That’s interesting, because this is another clear case of total fabrication.

I will skip the $135bn figure, produced by an influence NGO and once again counting paid leave, to focus on the more serious and important alleged $500bn loss from IRS cuts.

Firstly, the statement that “the Internal Revenue Service predicted more than $500 billion in revenue loss due to DOGE-driven cuts” is fraudulent. There was no official IRS prediction of such a loss. The Washington Post reported an anonymous short-term forecast. Its exact wording was:

“Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024, said the people, who spoke on the condition of anonymity to share nonpublic data. That would amount to more than $500 billion in lost federal revenue.”

So, did this happen? It did not. By April 2025, collections had risen 9.5% year over year to about $850 billion, rather than falling by more than 10%. This came after a roughly 25% reduction in the IRS workforce between January and May 2025. Over the whole of fiscal year 2025, revenue increased by 6%.

Here is a follow-up Washington Post article lamenting that DOGE unfortunately failed to lower tax revenue:

https://www.washingtonpost.com/business/2025/06/12/irs-tax-filing-season-beats-projections/

Wouldn’t that make the original claim dishonest, given that it was presented without any meaningful uncertainty? Apparently this distinction is unclear…

Also quoting Krugman, from today, who no longer writes for the NYT:

"Which party is out of touch, again?

Zohran Mamdani’s victory in New York, in the face of hysterical opposition from the big money, has grabbed many of the headlines, which I understand — it’s an amazing story. And I wonder what the right-wing tech bros are thinking: If Wall Street couldn’t buy New York, can they really buy America?

I’m seeing some commentators argue that Mamdani will be a problem for Democrats, allowing Republicans to paint them as extremists who are out of touch with America. But Republicans would do that anyway. For what it’s worth, Mamdani may be on the left, but all indications are that he’s a pragmatist who will get along fine with the rest of his party.

Meanwhile, you know which party is out of touch and riddled with extremists? The G.O.P.

If you look at recent Republican campaigns and positioning, it’s striking how much energy they’re putting into issues that just don’t matter much to ordinary Americans. Republicans may be obsessed with trans athletes, but most people aren’t. Polls and yesterday’s elections suggest that rants about the menace of illegal aliens have a lot less traction with the public than G.O.P. apparatchiks imagine — and that Americans don’t like the spectacle of masked ICE agents grabbing people off the street.

And if we’re talking about extremists within the party, well, Democrats have people like Mamdani, a mild-mannered guy who says he’s a socialist but…

Worse is coming and the markets seem to be in complete denial about it.

Oil has only really maintained the ~$100/barrel price because of record SPR releases worldwide. Also, that $100 price is kinda fake because it's a future price. The spot prices got much higher. Well, that runway is coming to an end. If the Strait of Hormuz re-opened today , we'd still be facing an energy shock. Plus there's famine coming.

Now the US won't run out of oil or refined petroleum products. The uS is now a net exporter. But it's a global marekt so the prices are going to go way up. And some countries and heavily dependent on oil for electricity. They are going to face blackouts.

So even though fertilizer shortages are skewed towards the Global South, food prices too are global so they're going up too.

In 1973, the energy shock took ~6 months to manifest [1].

But I think the real problem is dynamic pricing. Inflation is insidious. People start raising prices on the expectation of rising prices, thus causing prices to rise. But so many industries now are going well beyond that by essentially colluding through AI tools (eg RealPage) to further raise prices.

I honestly don't know how this ends without a deep, long recession.

[1]: https://paulkrugman.substack.com/p/oil-crises-past-and-possibly-future

If you destroy the integrity of the professional military corps through destructive and despotic behaviour that drives out those who hold to their principles, soldiers like this are the result of Hegseth’s cultification.

Nobody should be surprised.

Hegseth thinks loyalists + AI as brains can replace decades of actual real-world experience and keeping the highest ethics and morality standards with a bunch of AI-driven baboons with stars on their shoulders.

Paul Krugman wrote a good piece about exactly this.
https://paulkrugman.substack.com/p/cultifying-the-us-military

Everyone can already feel the ripples of what he is doing. There is an exodus in excellence in the upper echelons of the us military never seen before.

https://www.theguardian.com/us-news/2026/apr/22/navy-secretary-john-phelan-leaving-post

The US is getting less safe by the day. You can also see it on tourism data and forecasts. A lot of people don’t feel safe to travel to the US any longer.

Soccer World Cup in the US and 250th anniversary of the USA would have caused a tourism boom with past administrations. But people rather go to China instead.

https://www.independent.co.uk/travel/news-and-advice/tourists-america-us-china-canada-germany-europeb2961553.html

See also perhaps a post from today:

> Why are these terrible things happening? At a basic level they’re happening because Republicans want them to happen. Drastic cuts in food stamps and health care programs were central planks in Project 2025, which is indeed the Trump administration’s policy platform, and were written into legislation in the One Big Beautiful Bill Act that passed last summer.

[…]

> But there’s a further problem. Passing either a SNAP bill or a revised budget would require calling the House of Representatives back into session, which would in turn make it impossible for Mike Johnson, the speaker, to keep stalling the swearing-in of Adelita Grijalva, who won a special election more than 5 weeks ago.[1] And here’s the thing: Once sworn in, Grijalva would provide the decisive signature to trigger a vote in the House to release the Epstein files.[2]

* https://paulkrugman.substack.com/p/too-cruel-too-soon

I want the hype to die and the bubble to pop as much as Ed and Cory and everyone else writing about it but right now it’s just them basically recycling the same bad news and posting about it. I’d love to see some writing which looks at the factors which caused previous pops and to line them up with factors today to try and determine what’s actually coming. Clearly the market is irrational as hell right now but seemingly very little is going to change that. The closest I’ve seen to what I’m looking for is the coverage over at Notes on the Crises[0] and he also seems bewildered.

Edit: I found this piece which does look at historical bubbles/market events and tries to discuss how they plan out in terms of timing [1]

0: https://www.crisesnotes.com/ 1: https://paulkrugman.substack.com/p/why-arent-markets-freaking-out