Monday, April 30, 2012

Paul Krugman is Right On (as usual) About the Cause of the Weakness of the Recovery

Republicans Implement Anti-Growth Policies and Blame Democrats for Lack of Growth

The main theme of the upcoming Presidential election will be the economy, the level of the recovery and whether or not policies to expand the economy should take place in the future.  Mr. Romney will argue that Mr. Obama made the recession worse, wait a minute, Mr. Romney will say he didn’t say that, wait again, Mr. Romney will repeat it and then deny saying it.  Mr. Obama and rational economists will debate the composition and size of the Stimulus, while recognizing that the Stimulus  was a major factor in reversing the trend towards greater job losses and ultimately producing increases in employment.

The question as to why the economy has not recovered faster is pretty obvious.  Government, which is a major engine of economic growth sharply reduced its spending on goods and service.  Paul Krugman the eminent economist and columnist for the New York Times has the picture right here.

And here is his succinct commentary which neatly sums it up.

Obama, far from presiding over a huge expansion of government the way the right claims, has in fact presided over unprecedented austerity, largely driven by cuts at the state and local level. And it’s therefore an amazing triumph of misinformation the way that lackluster economic performance has been interpreted as a failure of government spending.

This is news that Mr. Romney must hide if he is going to win the election, because Conservatives win out only when ignorance triumphs over facts and information.

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