This is F'ing Serious. (Krugman: Depression, Not Ended)

[cthulu2016]

The fact that the entire American policy power structure (aside from Ben Bernanke and a handful of strong liberals in Congress) does not UNDERSTAND the economy is a PROBLEM that is bigger than most problems... a bigger problem than anything of the sort that makes the news. The Republicans and the President and a plurality of Democrats have a primitive and distorted view of reality that causes great and needless suffering to millions and millions of American persons.

Depression, Not Ended
Paul Krugman

Lousy jobs report. OK, you don’t want to put too much stress on one month’s numbers, yada yada, but it doesn’t look at all good.

But is this really a surprise? I mean, it’s true that the incipient housing recovery has made many people somewhat optimistic — I’ve been one of them — but when all is said and done, we are following strongly contractionary fiscal policy in an economy in which monetary policy is still ineffective because of the zero lower bound. How contractionary? Look at CBO’s estimates of the cyclically adjusted budget deficit (third column):



That deficit has declined from 5.6 percent of potential GDP in 2011 to 2.5 percent in 2013 — that’s 3 percent of GDP, which is a lot of austerity. Not all of that cut has even hit yet — the sequester isn’t in the macro numbers yet — but the rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail.

This is really stupid; as long as we’re at the zero lower bound, austerity is a huge mistake. Yet for what, the third time since 2009, all discussion in Washington has turned away from job creation to deficits (even though the debt problem has largely faded away) and the need for an early Fed exit from stimulus (even though unemployment remains high and inflation low).

Clearly, the answer is to cut Social Security!

http://krugman.blogs.nytimes.com/2013/04/05/depression-not-ended/

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[cthulu2016]

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[cthulu2016]

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[cthulu2016]

8. -

[uponit7771]

3. I disagree on one point, the housing numbers do NOT make MOST middle class Americans happy...

...it's mostly the rich and too diluted of a market even regionally to make a big difference to the avg home buyer.

Any numbers that are good economically have been good for the already well off...

When I see quit numbers go up I'll be happy

another well articulated article by Krugman

[antigop]

4. Clearly, the answer is to outsource more jobs! nt

[truebrit71]

5. ..and give more tax breaks to the uber-wealthy and corporations...

...because, you know, it's worked so well thus far...

[antigop]

6. yeah, that, too. That'll work, sure it will. nt

[Enrique]

7. and now the politics will be whom to blame

I think it's better to blame the republicans, but it would be nice if there were a possibility of making things better. Which it seems to be clear there isn't. The only thing we have the power to do is make the GOP look worse. And then we can win in 2014. And then what? Still nothing because we won't have a filibuster proof majority.

[ProSense]

9. That's a lot

That deficit has declined from 5.6 percent of potential GDP in 2011 to 2.5 percent in 2013 — that’s 3 percent of GDP, which is a lot of austerity. Not all of that cut has even hit yet — the sequester isn’t in the macro numbers yet — but the rise in the payroll tax is very clearly driving the latest bad numbers, which show big declines in retail.

...of deficit reduction. Time to stop now.