On numerous occasions, I’ve expressed my view that reducing government spending and increasing taxes, whatever the mix, will likely backfire by increasing rather than decreasing the budget deficit. I’ve tried to present this view in a dispassionate manner. Rightly or wrongly, I’ve always felt that it’s better — and more convincing — to speak than to yell.
Beneath my mild words, there’s a seething anger. After all, just like the rest of you, I’m going to be hurt by the ill-timed focus on fiscal rectitude. I’ll let Paul Krugman do my yelling for me:
If the downgrade of U.S. debt had any effect at all, it was to reinforce fears of austerity policies that will make the economy even weaker. So how did Washington discourse come to be dominated by the wrong issue?Hard-line Republicans have, of course, played a role . . . But our discourse wouldn’t have gone so far off-track if other influential people hadn’t been eager to change the subject away from jobs, even in the face of 9 percent unemployment, and to hijack the crisis on behalf of their pre-existing agendas.
Check out the opinion page of any major newspaper, or listen to any news-discussion program, and you’re likely to encounter some self-proclaimed centrist declaring that there are no short-run fixes for our economic difficulties, that the responsible thing is to focus on long-run solutions and, in particular, on “entitlement reform” — that is, cuts in Social Security and Medicare. And when you do encounter such a person, you should be aware that people like that are a major reason we’re in so much trouble.
For the fact is that right now the economy desperately needs a short-run fix . . . Unfortunately, giving lectures on long-run fiscal sustainability is a fashionable Washington pastime; it’s what people who want to sound serious do to demonstrate their seriousness. So when the crisis struck and led to big budget deficits — because that’s what happens when the economy shrinks and revenue plunges — many members of our policy elite were all too eager to seize on those deficits as an excuse to change the subject from jobs to their favorite hobbyhorse. And the economy continued to bleed.
Remember my “Is There Another 1937 in the Offing?” post? There’s an article in today’s New York Times that asks the same question.
Jimbo says:
Paul Krugman is wise and an accepted economic expert. Now, there may some homeschooled people who think the confidence fairy or Michelle Bachmann can pray our way to prosperity, but I think you will find most sane people understand what Dr. Krugman is trying to say.
And so what if he seems angry (your term, not his BTW). Attributing feelings to those who have not expressed them tarnishes your credibility. But if you had any credibility, you wouldn’t be rooting for the country to fail.
August 12, 2011, 2:03 pmMarc Schulman says:
Jimbo — I think you’re misinterpreting my post. The point I was trying to make was that, although my posts don’t sound angry, I share Krugman’s anger. I definitely am not rooting for the country to fail. My concern is that the fiscal austerity program will cause it to fail. That is exactly Krugman’s point.
I apologize if my post was somehow misleading.
August 12, 2011, 2:14 pm