THE FISCAL SKY IS NOT FALLING…

December 10th, 2012

Paul Krugman writes:

Let’s get one thing straight: America is not facing a fiscal crisis. It is, however, still very much experiencing a job crisis.

It’s easy to get confused about the fiscal thing, since everyone’s talking about the “fiscal cliff.” Indeed, one recent poll suggests that a large plurality of the public believes that the budget deficit will go up if we go off that cliff.

In fact, of course, it’s just the opposite: The danger is that the deficit will come down too much, too fast. And the reasons that might happen are purely political; we may be about to slash spending and raise taxes not because markets demand it, but because Republicans have been using blackmail as a bargaining strategy, and the president seems ready to call their bluff.

I would love to brand this bit of intelligent on the foreheads of every deficit hawk in Congress:

…the assertion that government spending creates jobs, but only if it goes to the military, doesn’t make sense.

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