From People’s World

In a recent column in the New York Times, economist Paul Krugman writes, “It’s amazing how this whole crisis has been fiscalized; deficits, which are overwhelmingly the result of the crisis, have been retroactively deemed its cause. And at the same time, influential people around the world have seized on the idea of expansionary austerity, becoming ever more adamant about it as the alleged historical evidence has collapsed.”

He continues: “And where there is skewed vision, the economy perishes.”

In other words, we are being sold a bill of goods by the Republican Party propaganda/attack machine (and some Democrats too) that will bring nothing good to the American people.

I fully agree.

If we track the growth curve of government deficits we will find that they lag, not lead the crisis. They are, as Krugman says, a result, not the cause of the economic malaise. They are a dependent, not an independent, variable.

This is not rocket science. It’s elementary economics. Even many conservative economists acknowledge that the causal sequence in this crisis was as follows: Declining economic activity led to rising deficits as revenues going to government – taxes and otherwise – fell, and claims for government payments – stabilizing mechanisms like unemployment insurance and food stamps – rose (and of course when you add to the brew tax cuts for the wealthy, then the lid goes off).

Faced with this reality, sensible lawmakers in our nation’s capital would have passed legislation to stimulate spending – public works jobs, aid to state and city governments, etc. – understanding that temporary deficits are a necessary price to be paid to get the economy going again.

Moreover, if anybody is going to sacrifice, it wouldn’t be working people who are already pressed from all sides. Sacrifice would come from people and institutions that can afford it, namely the very wealthy and the transnational corporations who have exploited the Great Recession to their advantage.

Read the rest of the article here.

Photo: From Madison, Wisc. protests on Feb. 18. (Teresa Albano/PW)

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