Paul Krugman: The Fatal Deficit Distraction

[Better Believe It]

Fatal Distraction
By Paul Krugman
September 2, 2011

Aren’t you glad we pivoted from jobs to deficits a year and a half ago?

Too bad there weren’t any prominent economists warning that the obsession with short-term deficits was a terrible mistake, that austerity would undermine hopes of recovery. Oh, wait.

The awful thing is that those of us who warned about all this — based not on some unorthodox doctrine, but on basic textbook macroeconomics — weren’t so much argued down as just ignored. Somehow, those with actual power were convinced that fiscal austerity wasn’t just an option but the only option, and that anyone arguing with that — even people like me and Joe Stiglitz, who had a few easy-to-understand credentials — were just not part of the serious discussion.

I haven’t fully organized my thoughts on exactly why this happened. But whatever the reasons, we are now reaping the consequences of a disastrous distraction of policy makers, who have been fighting phantoms while the real problems festered.

Read the full article at:

http://krugman.blogs.nytimes.com/2011/09/02/fatal-distraction/

[girl gone mad]

1. Another cheap shot at MMT from Krugman?

"based not on some unorthodox doctrine, but on basic textbook macroeconomics"

The way I see it, deficit doves like Krugman were just as much a part of the problem as deficit hawks. "Deficits will hurt us some day, but let's just ignore them for right now" is a loser argument. Any wonder why economists pushing this view were ignored?

[unkachuck]

2. "I haven’t fully organized my thoughts on exactly why this happened."

....the pukes wanted to keep the jobless numbers high to give Obama the boot....and Obama went along....the end.

[chill_wind]

3. Well. Yeah.

And Krugman (and Stiglitz)have had lots of respected company. Including James K Galbraith, and Dean Baker and a few hundred more:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x560332

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8674977

[Better Believe It]

4. Very true.

[earcandle]

5. Give me a break. Every CPA coursework text book on government accounting states what

has always been true, but we have been asleep about... Now we are awake.

Time for liens on property and bank accounts for deficit compulsory unfavored TAX REVENUE not collected in the last 30 years. The Feds are the only people with the authority to put liens on banks and property for tardy tax revenue uncollected to pay with penalties and interest, enough to clear our debt and move forward with jobs development. Time to employ some accounting staff to send out bills and report on Accounts Receivables. SEC, have they filed? Better have our rules and regulations intact or we are calling our sons and daughters home from all of it you create and you will have no more. Be family. Be strong. If you don't have one, be adopted into one asap.