The Austerity Debacle - By PAUL KRUGMAN

[kpete]

The Austerity Debacle
By PAUL KRUGMAN

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

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And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

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Strange to say, however, those warnings from economists proved all too accurate. And we’re quite fortunate that Mr. Obama did not, in fact, do a Cameron.

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The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.

http://www.nytimes.com/2012/01/30/opinion/krugman-the-austerity-debacle.html?_r=2&ref=opinion#

[Jackpine Radical]

1. Krugman nails it once again on the effects of RW "economics."

Now back to whether the US is gonna succumb to Sharia law.

[bemildred]

2. Gee, it failed back then too ...

But not as bad as this time. This is corruption, venality, that pretending not to know what is happening, pretending to forget.

[lib2DaBone]

3. The only thing that can spark recovery is infrastructure spending.....

Our current govt. (Obama included) is focused on Military wars and nation-building overseas.... exactly the WRONG approach.

If Obama was committed to rebuilding America.. he certainly would not have signed NDAA.... he would not have signed the Korean trade agreements and he would not have surged the wars in Afghanistan.

He would not have appointed William Lynn or Mark Patterson.....or Jeffery Immelt as jobs zsar..Michael Taylor as FDA co-chairman....

All of Obama's appointments are disasters... sorry to say.. but its the truth.. just saying.

[MannyGoldstein]

4. Why can't Krugman ever focus on the positives?

For instance, the banker bonuses were saved. And growing up with a car for your home is pretty cool, as millions more children now know.