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View Diary: Krugman and the Paradox of Austerity (93 comments)

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  •  paradox? (2+ / 0-)
    Recommended by:
    drewfromct, Dr Squid

    Austerity during a recession hurts us in the short and long-term is a paradox? I thought it was just obvious.

    •  Well, the paradox is that + (4+ / 0-)
      Recommended by:
      godlessmath, shaharazade, MKinTN, Mimikatz

      in a recession, it doesn't even reduce deficits. So yes, we knew it slowed the economy, etc. But the idea is that the pain was worth it for the gain. However, there's no gain.

      So we've always known that cutting spending slows growth, but the paradox is that cutting spending increases debts.

      Thousands of years ago the question was asked: 'Am I my brother's keeper?' That question has never yet been answered in a way that is satisfactory to civilized society. ~ Eugene V. Debbs

      by PlutocracyFiles on Tue Sep 20, 2011 at 03:34:21 AM PDT

      [ Parent ]

      •  Sorry (1+ / 0-)
        Recommended by:
        Dr Squid

        still seems obvious to me.

        •  I'm sure it does (2+ / 0-)
          Recommended by:
          godlessmath, Hillbilly Dem

          Because you know and I know that R (revenue) and S (spending) are not independent variables. "Common sense" says that they are, which is why...

          A: R - S1 = D1

          B: R - S2 = D2

          Common sense = If S2 < S1, D2 < D1
          Reality (paradox) = If S2 < S1, D2 >> D1

          Again, obvious to you and me, but it seems to cause a lot of head explosions.

          If bin Laden owned an oil company, [the GOP would] be wearing long beards and shooting at US troops in Afghanistan.-Geekesque

          by Dr Squid on Tue Sep 20, 2011 at 09:39:22 AM PDT

          [ Parent ]

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