Monday, June 21, 2010

Deficit hawks threaten recovery!

Nobel Prize winning economist Paul Krugman writes:

...we have a severely depressed economy — and that depressed economy is inflicting long-run damage. Every year that goes by with extremely high unemployment increases the chance that many of the long-term unemployed will never come back to the work force, and become a permanent underclass. Every year that there are five times as many people seeking work as there are job openings means that hundreds of thousands of Americans graduating from school are denied the chance to get started on their working lives. And with each passing month we drift closer to a Japanese-style deflationary trap.

Penny-pinching at a time like this isn’t just cruel; it endangers the nation’s future. And it doesn’t even do much to reduce our future debt burden, because stinting on spending now threatens the economic recovery, and with it the hope for rising revenues.

So now is not the time for fiscal austerity.

The rest of the article is linked.


Peter said...

There is precious little more to add to this, since Krugman says most all of it -- and always does. The only additional bit to say is that everyone should read his column Monday and Friday of each week, and then tune into his blog on the NYTimes website.

Anonymous said...

I can't believe that Universities are still taking money from students knowing that they are going to have difficulties finding jobs when they graduate. That seems predatory to me.