Krugman: Why the “balanced budget fetish” is “deeply irresponsible”

[applegrove]

Krugman: Why the “balanced budget fetish” is “deeply irresponsible”

by Luke Brinker at Salon

http://www.salon.com/2015/01/23/krugman_austerians_balanced_budget_fetish_is_deeply_irresponsible/

"SNIP....................



Things are improving under Draghi, Krugman argues, but as a central bank leader, Draghi isn’t a benevolent dictator; Germany still has considerable power to deny sensible relief to debtor nations like Greece, and there’s only so much monetary policy can do when fiscal policymakers adhere to the woefully wrongheaded notion that it’s a good idea to cut spending in the midst of a depressed economy:

The terrible thing is that Europe’s economy was wrecked in the name of responsibility. True, there have been times when being tough meant reducing deficits and resisting the temptation to print money. In a depressed economy, however, a balanced-budget fetish and a hard-money obsession are deeply irresponsible. Not only do they hurt the economy in the short run, they can — and in Europe, have — inflict long-run damage, damaging the economy’s potential and driving it into a deflationary trap that’s very hard to escape.

Nor was this an innocent mistake. The thing that strikes me about Europe’s archons of austerity, its doyens of deflation, is their self-indulgence. They felt comfortable, emotionally and politically, demanding sacrifice (from other people) at a time when the world needed more spending. They were all too eager to ignore the evidence that they were wrong.

And Europe will be paying the price for their self-indulgence for years, perhaps decades, to come.



....................SNIP"

[99th_Monkey]

1. K & R ... Krugman impresses me more and more. “balanced budget fetish”

Krugman hits his stride with “balanced budget fetish”

[CentralMass]

2. What is irresponsible is giving both parties and our unrepresentive government

an out from being held accountable for fiscal policies that have given us a gross debt to GDP ratio of over 100% while they, dole out corporate welfare and cover the losses of criminal and immoral financial companies after their predatory lending practices brought this country to knees. We can bail out crooks and dole out corporate welfare and fight unfunded wars, but can't take care of the needs of the poor and middle class who collectively pay there fair share trough taxes and their labor. Even the democrats have thrown us under the bus. We need a balanced budget and Pay As You Go to put boundaries on how badly those in power can f.ck us over. Krugman is full of it.

[applegrove]

5. What is bull**** is not getting the rich to pay proper taxes.

Then there would be no debt. It is the democrats who are the ones who actually try to balance the budget and have for the last 35 years. It is the GOP who does their best to unbalance the budget.

[airplaneman]

6. Bingo - we have a winner. thanks n/t.

[woo me with science]

3. A vicious, malignant betrayal by our president and the Democratic Third Way

that I wrote about when it was happening. Our Third Way president cemented this lying narrative about the budget that until then had been dismissible as merely lying Republican talking points... and he made it BIPARTISAN.

This is the poison of the Third Way. This is why we need to end the corporate infiltration of our party:

Our Poisoned Democratic Message (from 2011)
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1482232


....We have a much more serious problem than this particular manufactured crisis. Our Democratic President has publicly validated for the American people the Republican framing of our economic problems.

The impact of doing that cannot be overstated.

He stood up there and actually told Americans that cutting spending instead of focusing on jobs first will give us the "solid fiscal situation" we need before we focus on jobs.

It is a vicious and damaging lie for our country. Three hundred economists have weighed in warning this President that he needs to focus on jobs first and not starve the economy even more with spending cuts. But he gets up there and spews Republican talking points about slashing spending first.

For years, Republicans have drummed lies into the heads of the American people about the source of our economic problems and how to fix them. President Obama had from Day One of this Presidency to change the narrative and the national conversation about the economy, in order to build support for Democratic policies that could actually help us.

Instead, he stands up in front of the country to proclaim with the Republicans that now is the time to cut spending, "trim" benefits, and "eat our peas." It does not matter if some believe it is a clever tricky lie, and a "rope-a-dope." Presidents with cheap, tricky rhetoric will never lead a hurting nation in a fundamentally new direction. Cheap tricks do not substitute for desperately needed passion, leadership, and vision.

He had from day one to actually lead. To be a Democrat.

Instead, he has cemented the Republican narrative and made it a "bipartisan" narrative in a way that will not be undone anytime soon.

[F4lconF16]

7. K&R for the truth

Some of us will not make excuses.

[Enthusiast]

9. +1 a whole bunch. I agree completely.

[woo me with science]

4. K&R A lying, bipartisan narrative that needs to be exposed for the corporatist scam it is. nt

[woo me with science]

8. kick