“This is a uniquely bad time for austerity.” Which of course makes it that much more likely. Thanks, stupid and craven leaders!

But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.

Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?

Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.

So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.

One Response to Krugman

  1. imhotep February 8, 2013 at 11:19 am #

    Sequester = Austerity. $1.2 trillion dollars over 10 years = $120 billion dollars cut each year. The political class, which includes most Democrats, all Republican and the President, have talked about a combination of increasing revenues (more jobs and higher taxes) and lower spending (cutting Soc. Sec., Medicare, etc.) to reduce the deficit by $4 trillion dollars over 10 years = $400 billion dollars each year. $120 billion by sequester or $400 billion by combo. Can anyone make any sense out of this math and NOT come up with an austerity program? The solution is wealth equalization. But that will take a whole bunch of Socialists in the Congress and one in the WH. Or getting rid of every Republican holding any public office anywhere.

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