Dear Dirty America


On Fiscal Austerity

September 20
03:47 2011
David Shankbone

Paul Krugman (you know, that guy with the Nobel Prize in Economic Sciences) writes:

Doctors used to believe that by draining a patient’s blood they could purge the evil “humors” that were thought to cause disease. In reality, of course, all their bloodletting did was make the patient weaker, and more likely to succumb.

Fortunately, physicians no longer believe that bleeding the sick will make them healthy. Unfortunately, many of the makers of economic policy still do. And economic bloodletting isn’t just inflicting vast pain; it’s starting to undermine our long-run growth prospects.
Some background: For the past year and a half, policy discourse in both Europe and the United States has been dominated by calls for fiscal austerity. By slashing spending and reducing deficits, we were told, nations could restore confidence and drive economic revival.

I think Krugman’s right, but what do I know? Not much when it comes to fiscal policy and austerity measures. But I do know that an awful lot of people in my neighborhood haven’t been to work for months or years, and they’re pretty goddamned desperate (their words, not mine).

Either way, I trust Krugman. I’d have him over for dinner. Not that he’d accept the offer, but the offer has been made. Before he arrived, I’d brush up on my Keynesian economics. And you should too. Otherwise, how do you know?

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