Paul Krugman: Freeze Frame

[amborin]

Freeze Frame

Yep, that’s exactly what we needed: a transparently cynical policy gesture, trivial in scale but misguided in direction, and in effect conceding that your bitter political opponents have the right idea.

http://krugman.blogs.nytimes.com/



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and, from link on Krugman's blog:

Progressive Economic Think Tanks' Ideas for Reducing the Deficit:

http://www.ourfiscalsecurity.org/fiscal-blueprint/

excerpt:

".....We believe that a sound fiscal path must follow somebasic guidelines:

1. Jobs frst. Jobs and economic growth are essential to our capacity to reduce deficits, and there should be no across-the-board spending reductions until the economy fully recovers.....

2. Stabilize debt. Over the long term, national debt as a share of the economy should be stabilized and eventually brought onto a downward trajectory.

3. Build on economy-boosting investments.

We must build and maintain initiatives that directly support long-term job and economic growth. Failing to invest adequately in these efforts – or sacrifcing them to short-term defcit reduction – would be a dereliction of sound public management.

4. Target revenue increases.
Revenue increases shouldcome primarily from those who have benefted most from the economic gains of the last few decades.

5. No cost shifting. Debt reduction must be weighed against other economic priorities. Policies that simply shift costs from the federal government to individuals and families may improve the government’s balance sheet but would worsen the condition of many Americans, leaving the overall economy no better off......."

[mmonk]

1. Recommended but countered by an austerity fan.

[amborin]

5. lol, there seem to be a fair amount

[Autumn]

2. yeah we do have to ask, but I think we know

the answer.

[riderinthestorm]

3. More from his blog regarding "structural unemployment"...

"Once you realize that’s what it’s about, you see that many of the things people say show a rise in structural unemployment don’t really bear on the issue. You say we had a big bubble in the past? OK, but that doesn’t explain why trying to raise employment now would cause inflation. You say that we’ve been living beyond our means? OK, but again, why does that limit the number of workers we can employ making stuff for somebody?

So where’s the evidence of a structural rise in unemployment in America? Wage growth is slowing; core inflation is falling; clearly, we’re not hitting an inflationary wall right now. Maybe the wall is closer than it seems — but then you look for evidence of skills in short supply, regions without enough workers, and so on, and it isn’t there.

As far as I can tell, the only economists who believe that we’re suffering largely from a rise in structural unemployment are those who are ideologically committed to the view that the demand side of the economy doesn’t matter — and so by definition, in their universe, any large rise in unemployment must be structural.

But you have to ask, why do these people have a voice in the Obama administration?"

[geckosfeet]

4. The fiscal blueprint pdf is worth it's weight in gold. Much as I agree with Krugman

most of the time, the other link in your post is far more informative and full of specifics and proposals. I will re-post:

Investing in America’s Economy

Our suggested budget blueprint achieves lower deficits in the medium term and balances the primary federal budget (the year’s current revenue and spending, not counting interest payments on past debt) in less than a decade. Tis path recognizes the need to increase revenue while targeting certain areas for reductions in spending; in particular, our proposed path reallocates spending away from the Department of Defense by adopting common sense spending reductions.

Finally, the blueprint protects core priorities such as Social Security and health care from economically counterproductive reductions in benefits. The net impact of the spending and revenue adjustments we put forth in this blueprint will produce the following short- and long-term results:

• Substantial and sustained increased funding for job creation and investments, especially in the near term


• A budget path that significantly improves the 10-year budget window


• A transition from a primary deficit to a primary surplus in 2018, and sustainable debt levels by the end of the decade


• An improvement in the path for public debt in the long term (stabilizing debt as a share of the economy beyond 2025)


• A solid footing for Social Security, Medicare, and Medicaid for the long term


• A modernized tax code that raises adequate revenue fairly and efficiently

Just as an investment-oriented federal policy helped to create a thriving middle class in the postwar period, an ideology of disinvestment has helped to erode it over the past 30 years. Another path is not only possible, but necessary. Although there are many paths to fiscal balance – some of which include drastic spending and entitlement cuts and the continuation of a regressive tax system – only a path that fosters broadly shared economic growth and security will be sustainable in the long run.

Investing in America’s Economy

As much sanity, logic and reason as you can take at the link.