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Krugman: Block Those Metaphors [View All]

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ProSense Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-13-10 09:10 AM
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Krugman: Block Those Metaphors
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Block Those Metaphors

By PAUL KRUGMAN

Like it or not and I dont the Obama-McConnell tax-cut deal, with its mixture of very bad stuff and sort-of-kind-of good stuff, is likely to pass Congress. Then what?

The deal will, without question, give the economy a short-term boost. The prevailing view, as far as I can tell and that includes within the Obama administration is that this short-term boost is all we need. The deal, were told, will jump-start the economy; it will give a fragile recovery time to strengthen.

I say, block those metaphors. Americas economy isnt a stalled car, nor is it an invalid who will soon return to health if he gets a bit more rest. Our problems are longer-term than either metaphor implies.

<...>

The actual stimulus in the plan comes from the other measures, mainly unemployment benefits and the payroll tax break. And these measures (a) wont make more than a modest dent in unemployment and (b) will fade out quickly, with the good stuff going away at the end of 2011.

The question, then, is whether a year of modestly better performance is worth $850 billion in additional debt, plus a significantly raised probability that those tax cuts for the rich will become permanent. And I say no.

more

As for needlessly adding to the debt, if only there was a way to pass the package without the tax cuts for the rich.

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