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The Big Fail


US Politics & Gov't  (tags: economy, government, politics, government spending versus spending cuts )

Lynn
- 563 days ago - nytimes.com
...there is one theme dominating discussion: the ongoing economic crisis. This isn't how things were supposed to be. ... by now we'd be talking about how the great slump ended, not why it still continues. So what went wrong?



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Comments

Jae A. (323)
Friday January 11, 2013, 12:24 am
What didn't... was my first thought....then, once I read the article I see that he covered that as well :-).

Thanks again Lynn..as this was a great read for me personally. He's right on spot with his thinking/research/commen sense, as an economist and intelligent person in general....
 

Lynn Squance (227)
Friday January 11, 2013, 1:29 am
"It’s tempting to argue that the economic failures of recent years prove that economists don’t have the answers. But the truth is actually worse: in reality, standard economics offered good answers, but political leaders — and all too many economists — chose to forget or ignore what they should have known."

One of the things I like about Krugman, and Robert Reich for that matter, is that he can put many things into terms that the non economists among us can understand. Take the following example:

"For an economy is not like a household. A family can decide to spend less and try to earn more. But in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income. If everyone tries to slash spending at the same time, incomes will fall — and unemployment will soar. "

Evidence over the 20 plus years has shown that in order to get the economy back on track, government needs to stimulate it by spending --- not frivilous spending, but spending on infastructure (investment in the country and its ability to do business). This is what Reagan did, Clinton did, Daddy Bush too, and Baby Bush in his first term. Things looked up, although Baby Bush is a story unto himself because he engaged in an illegal war and the war in Afghanistan that were put on the national credit card. That certainly didn't help things when the financial crisis hit in 2008. But what is the current thinking in the Republican/Teabagger dominated Congress --- SLASH! SLASH!! SLASH!!! spending. There is a reluctant agreement that taxes will rise on the folks with incomes over $400,000 but my guess is that with the next set on hurdles on the track, tax rates will again become a bargaining chip for the GOP. Wouldn't surprise me a bit.

I've seen news in the US taking about "doing the Greece". That's not a new dance step but rather an austerity programme that is so misguided that it has made things worse in Greece. Want a real revolution, follow Greece into austerity. Even as Krugman notes, the IMF has now realised that the "slash, slash, slash"
austerity paradigm just doesn't work.

Krugman's conclusion: "The truth is that we’ve just experienced a colossal failure of economic policy — and far too many of those responsible for that failure both retain power and refuse to learn from experience. " And if you ask me, he is spot on!
 

Elizabeth M. (66)
Friday January 11, 2013, 1:00 pm
Noted. Great article, thanks Lynn.
 

John B. (215)
Friday January 11, 2013, 7:47 pm
Thanks Lynn for the link to the article by Mr. Krugman. He is and has been right on target. Spending not austerity measures is the answer for a deep recession. Read and noted. Great post Lynn.
 

Jason S. (57)
Friday January 11, 2013, 8:55 pm
Good Posting, thanks
 

JL A. (272)
Saturday January 12, 2013, 5:32 pm
As usual, Krugman is spot on! And government budgeting is different than business budgeting for very good reasons (missions are different) and educational systems know this well: why they offer separate MBA and MPA (masters of Public Administration). I just hope the GOP don't crash our economy again with their inappropriate allegiance to consumer program cuts.
 

Barbara J. (9)
Saturday January 12, 2013, 5:55 pm
I agree, my friends and I talk often about we (Americans) have to clean house and state that if thing don't change we'll just keep voting congress out until we have congress that acts like adults and gets things done.
 

Past Member (0)
Sunday January 13, 2013, 1:46 pm
Finally, some one is saying it. He can't get through the resistance, though. They have an agenda.
 

Robert O. (12)
Monday January 14, 2013, 12:53 am
Thanks Lynn.
 

Lois Jordan (55)
Wednesday January 16, 2013, 5:46 pm
Thanks for posting, Lynn. Krugman is right about the austerity now threatening Europe. Our leaders would be wise to notice and not make the same mistakes. Too bad Obama wouldn't nominate him to take Geithner's place!
 
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