Monday, March 26, 2012

Paul Krugman Illustrates the Future of the American Economy if Republican Fiscal Policy is Adopted

The Anti-European Conservatives Will End Up Being Europeans

One of the recurrent themes of the Republican attacks against the Obama administration is that they are pseudo European socialist (while supposedly people like Mr. Romney, Mr. Gingrich and Mr. Santorum are real Americans, go figure).  So one can contrast European fiscal policy in response to the Great Recession with U. S. policy implemented by Mr. Obama and the Democrats. 

The U. S. pursued expansionary fiscal policy in response to the recession, the Europeans focused on reducing the deficits, and so raised taxes a little and cut spending a lot.  Paul Krugman has graphed the economic growth for various European countries against government direct purchasing, and here is the result.

His purpose was to show how countries that pursued austerity have severely damaged their economies.  Our purpose is to show what will happen if Republican policy of huge cuts in government spending take place.  It’s a no brainer, the U. S. will be the countries in the lower left quadrant.

An even better point is made by Mr. Krugman as he compares economic performance in Britain with that of the U. S.  Britain has pursued the Conservative policy of focusing on the deficit by cutting spending and firing a whole bunch of government employees.  Here is how that is working out.


So the core Republican policy will do what?  It’s a pretty clear picture, thanks to Mr. Krugman.

1 comment:

  1. The austerity/Reagonomics argument has always presented a pretty clear picture...nonsense from the eighties. Trickle down didn't work then and hasn't worked since. It is nothing but a bogus argument for vertical wealth transfer.