Neubarth
At the Ballpark July 30th
Krugman: America Is In Serious Trouble
The nature of Americas troubles is easy to state. Were in the aftermath of a severe financial crisis, which has led to mass job destruction. The only thing thats keeping us from sliding into a second GreatDepression is deficit spending. And right now we need more of that deficit spending because millions of American lives are being blighted by high unemployment, and the government should be doing everything it can to bring unemployment down.
In the long run, however, even the U.S. government has to pay its way. And the long-run budget outlook was dire even before the recent surge in the deficit, mainly because of inexorably rising health care costs. Looking ahead, were going to have to find a way to run smaller, not larger, deficits.
How can this apparent conflict between short-run needs and long-run responsibilities be resolved? Intellectually, its not hard at all. We should combine actions that create jobs now with other actions that will reduce deficits later. And economic officials in the Obama administration understand that logic: for the past year they have been very clear that their vision involves combining fiscal stimulus to help the economy now with health care reform to help the budget later.
The sad truth, however, is that our political system doesnt seem capable of doing whats necessary.
On jobs, its now clear that the Obama stimulus wasnt nearly big enough. No need now to resolve the question of whether the administration should or could have sought a bigger package early last year. Either way, the point is that the boost from the stimulus will start to fade out in around six months, yet were still facing years of massunemployment. The latest projections from the Congressional Budget Office say that the average unemployment rate next year will be only slightly lower than the current, disastrous, 10 percent.
Op-Ed Columnist - March of the Peacocks - NYTimes.com
The nature of Americas troubles is easy to state. Were in the aftermath of a severe financial crisis, which has led to mass job destruction. The only thing thats keeping us from sliding into a second GreatDepression is deficit spending. And right now we need more of that deficit spending because millions of American lives are being blighted by high unemployment, and the government should be doing everything it can to bring unemployment down.
In the long run, however, even the U.S. government has to pay its way. And the long-run budget outlook was dire even before the recent surge in the deficit, mainly because of inexorably rising health care costs. Looking ahead, were going to have to find a way to run smaller, not larger, deficits.
How can this apparent conflict between short-run needs and long-run responsibilities be resolved? Intellectually, its not hard at all. We should combine actions that create jobs now with other actions that will reduce deficits later. And economic officials in the Obama administration understand that logic: for the past year they have been very clear that their vision involves combining fiscal stimulus to help the economy now with health care reform to help the budget later.
The sad truth, however, is that our political system doesnt seem capable of doing whats necessary.
On jobs, its now clear that the Obama stimulus wasnt nearly big enough. No need now to resolve the question of whether the administration should or could have sought a bigger package early last year. Either way, the point is that the boost from the stimulus will start to fade out in around six months, yet were still facing years of massunemployment. The latest projections from the Congressional Budget Office say that the average unemployment rate next year will be only slightly lower than the current, disastrous, 10 percent.
Op-Ed Columnist - March of the Peacocks - NYTimes.com
