Paul Krugman: Ever since the Bush-era housing and debt bubbles burst, the U.S. economy has suffered from inadequate demand. [In this case] anything that increases spending creates jobs. And if private spending is depressed, public spending should take its place. [So] the Obama stimulus did reduce the unemployment rate compared [to no] stimulus. [But] Republican leaders have [always] held the opposite view, insisting that we should slash public spending in the face of high unemployment. And after 2010, when Republicans took control of the House, [there was] an unprecedented decline in real government spending per capita, which leveled off only in 2014. [Now] this kind of fiscal austerity in a depressed economy is destructive; [any positive] economic news is because [all] governments have finally stopped [the] cutting [that] has cost a lot of jobs. [Concerning] jobs [that] would be lost because of the sequester — the big cuts in federal spending that Republicans extracted in 2011 by threatening default — [the C.B.O.s] best estimate was 900,000, only part of the total loss. The guilty parties here will never admit that they were wrong. But look closely: you see clear signs that they don’t really believe in their own doctrine.
Posted on: Mon, 12 Jan 2015 09:54:55 +0000
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