from Krugman's Kolumn in today's NYT: >> Mr. Obama’s camp argues for an active government role; his last major >> economic proposal, the American Jobs Act, would have tried to accelerate >> recovery by sustaining public spending and putting money in the hands of >> people likely to use it. Republicans, on the other hand, insist that the >> path to prosperity involves sharp cuts in government spending.
>> And Republicans are dead wrong. >> The latest devastating demonstration of that wrongness comes from the >> International Monetary Fund, which has just released its World Economic >> Outlook, a report combining short-term prediction with insightful economic >> analysis. This report is a grim and disturbing document, telling us that the >> world economy is doing significantly worse than expected, with rising risks >> of global recession. But the report isn’t just downbeat; it contains a >> careful analysis of the reasons things are going so badly. And what this >> analysis concludes is that a disproportionate share of the bad news is >> coming from countries pursuing the kind of austerity policies Republicans >> want to impose on America. >> O.K., it doesn’t say that in so many words. What the report actually says >> is: “Activity over the past few years has disappointed more in economies >> with more aggressive fiscal consolidation plans.” But that amounts to the >> same thing. >> For leading Republicans have very much tied themselves to the view that >> slashing spending in a depressed economy — “fiscal consolidation,” in >> I.M.F.-speak — is good, not bad, for job creation. Soon after the midterm >> elections, the new Republican majority in the House of Representatives >> issued a manifesto on economic policy — titled, “Spend less, owe less, grow >> the economy” — that called for deep spending cuts right away and pooh-poohed >> the whole notion that fiscal consolidation (yes, it used the same term) >> might deepen the economy’s slump. “Non-Keynesian effects,” the manifesto >> declared, would make everything all right. >> Well, that turns out not to be remotely true. What the monetary fund shows >> is that the countries pursing the biggest spending cuts are also the >> countries that have experienced the deepest economic slumps. Indeed, the >> evidence suggests that in brushing aside the standard view that spending >> cuts hurt the economy in the short run, the G.O.P. got it exactly wrong. >> Recent spending cuts appear to have done even more harm than most analysts — >> including those at the I.M.F. itself — expected.<< what's interesting is that in last night's Veepstakes, Joe Biden agreed with the GOP: he saw Dubya's deficit (charging two wars and tax cuts for the rich on the government's "credit card") as causing the recession & financial crisis of 2008. This balance-the-budget mania is taking over. The good news is that Biden did note that Social Security is not about to go broke, contrary to geekboy's assertions. -- Jim Devine / If you're going to support the lesser of two evils, at the very least you should know the nature of that evil. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
