In The Pain Caucus Professor Krugman starts with:
But what I currently find most ominous is the spread of a destructive idea: the view that now, less than a year into a weak recovery from the worst slump since World War II, is the time for policy makers to stop helping the jobless and start inflicting pain.
Krugman continues with:
Now, however, demands that governments switch from supporting their economies to punishing them have been proliferating in op-eds, speeches and reports from international organizations. Indeed, the idea that what depressed economies really need is even more suffering seems to be the new conventional wisdom, which John Kenneth Galbraith famously defined as "the ideas which are esteemed at any time for their acceptability."
Krugman then points out:
Both textbook economics and experience say that slashing spending when you’re still suffering from high unemployment is a really bad idea — not only does it deepen the slump, but it does little to improve the budget outlook, because much of what governments save by spending less they lose as a weaker economy depresses tax receipts.
Later Krugman points out that:
Last week conservative members of the House, invoking the new deficit fears, scaled back a bill extending aid to the long-term unemployed — and the Senate left town without acting on even the inadequate measures that remained. As a result, many American families are about to lose unemployment benefits, health insurance, or both — and as these families are forced to slash spending, they will endanger the jobs of many more.
And Krugman ends with:
More and more, conventional wisdom says that the responsible thing is to make the unemployed suffer. And while the benefits from inflicting pain are an illusion, the pain itself will be all too real.
Europe needs more spending to keep the European Nations from failing. The problem is not deficit spending in Greece, Spain, or Portugal, but rather a lack of spending that is needed to pull these countries out of their slump. The US also needs more spending, but the spending in the US and the world needs to be directed towards education, research, development, infrastructure development, ending global warming, food, shelter, health care, generally in improving productivity. No more spending on war.
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