Paul Krugman: “Hey, we aren’t really an advanced country; we’re a banana republic!”

by Ben Hoffman

What should Democrats do?

The answer is that they should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

So the potential cost of giving in to Republican demands is high. What about the costs of letting the tax cuts expire? To be sure, letting taxes rise in a depressed economy would do damage — but not as much as many people seem to think.

Oh, and what about confidence? I’ve been skeptical about claims that budget deficits hurt the economy even in the short run, because they undermine confidence in the government’s long-run solvency. Advanced countries, I’ve argued, have a lot of fiscal leeway. But anything that makes permanent extension of obviously irresponsible tax cuts more likely also sends a strong signal to investors: it says, “Hey, we aren’t really an advanced country; we’re a banana republic!” And that can’t be good for the economy.

Read more…

Advertisements

16 Comments to “Paul Krugman: “Hey, we aren’t really an advanced country; we’re a banana republic!””

  1. Today while driving I was listening to an NPR story about how homeless shelters are overflowing with people, and once the unemployment benefits stop they’ll be families sleeping on street corners. Republicans cry about spending and want to cut benefits for those most in need, but meanwhile they want to add 4 trillion in debt by letting the right off the hook and we spend 1 trillion on war.

    I swear, they might as well come out and say they support euthanizing the poor and cutting all federal agencies except the military. Fuck poor and middle class people, as long as they can blow up dark skinned foreigners they’re happy.

    • once the unemployment benefits stop they’ll be families sleeping on street corners.

      When an individual has lost his job and begins to collect unemployment benefits, do you know what event most precipitates him getting a new job?

      In other words, when does someone go back to work?

      • Duh, when he’s offered a job?

      • Duh, when he’s offered a job?

        Nope. That ain’t it.
        Try again Tiger.

      • what is it, sparky?

        tarheelred.files.wordpress.com/2010/11/unemployment-transition-pittsburgh.jpg

        and then:

        tarheelred.files.wordpress.com/2010/11/unemployment-transition-denmark.jpg

        Last, Google this:

        “Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. … In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of ‘Eurosclerosis,’ the persistent high unemployment that affects a number of European countries.”

      • Hey, I didn’t know we were living in Europe! Must be the result of plate tectonics, although the Atlantic is a rift zone so we’re moving closer to Asia, not Europe. Maybe we were subducted under Asia and popped up on the other side. Damn, I knew I shouldn’t have taken a nap today. 🙂

      • Hey, I didn’t know we were living in Europe! Must be the result of plate tectonics, although the Atlantic is a rift zone so we’re moving closer to Asia, not Europe. Maybe we were subducted under Asia and popped up on the other side.

        What in the Sam Hell are you talking about?

        The Economist in questions says:

        Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. …

        That means that the policy of providing assistance to unemployed workers leads to structural unemployment. If you and your ilk haven’t noticed, we’re looking at 2 more years of > 9% unemployment.

        Wanna know why? ‘Cause of ass hat ideas like paying people not to work will lead to them working.

  2. Unemployment benefits are not enough for people to kick back eating chips and soda on the couch. The guy they had on to interview was desperately trying to find a job to support his family after he was let go of his engineering position. Even with unemployment benefits he was having to raid is 401k in order to pay for heat, food, rent, and insurance. It might be easy to just assume that people on unemployment benefits are lazy, and that they’re just not trying hard enough, but it doesn’t change the reality that people simply can’t find work and their families are starving. I think it’s no coincidence that the people who make this assumption are never the ones who have to tell hungry children to go back to bed because you can’t find work.

    • Unemployment benefits are not enough for people to kick back eating chips and soda on the couch

      I had to check twice to make sure, but I didn’t mention anything about chips, soda or couches.

      Even with unemployment benefits he was having to raid is 401k in order to pay for heat, food, rent, and insurance.

      I believe it.

      the reality that people simply can’t find work and their families are starving.

      Oh, he CAN find work. And his family isn’t starving.

      paladin. Rather than just talk so that you can hear what you say, try to answer the question. Serious.

      Try. To. Answer. The. Question.

      • Godless did answer the question and explained why your silly ass theory is bullshit.

        There currently is one job for every five unemployed people. No matter how hard people try, there aren’t enough jobs for everybody.

      • Godless did answer the question

        No he didn’t. He talked a lot, but no answering of questions.

  3. I love how inflated the price tag is so that the extreme left can feel good about screwing everyone, including the poor people the allege to care about. It’s hilarious watching the histrionics and the hysterical shrieking.
    The sky is falling The Sky is falling!

  4. Fallen?!?
    What drugs are you on?
    http://www.usdebtclock.org/
    —-
    Blackwhite is defined as follows:
    “ …this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink. ”

    —Orwell, 1984

    The word is an example of both Newspeak and doublethink. It represents the active process of rewriting the past, control of the past being a vital aspect of the Party’s control over the present.

    The ability to blindly believe anything, regardless of its absurdity, can have different causes: respect for authority, fear, indoctrination, even critical laziness or gullibility. Orwell’s blackwhite refers only to that caused by fear, indoctrination, or repression of one’s individual critical thinking (“to know black is white”), rather than caused by laziness or gullibility. A true Party member could automatically, and without thought, expunge any “incorrect” information and totally replace it with “true” information from the Party. If properly done, there is no memory or recovery of the “incorrect” information that could cause unhappiness to the Party member by committing thoughtcrime. This ability is likened to the total erasure of information only possible in electronic storage.

    Congrats you graduated with a PhD in blackwhite.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: