Author: PAUL KRUGMAN
Source: The New York Review of Books
Publication Date: 24 May 2012 (used 5 May 2012)
Link: How to End This Depression
Stephan: In the 15 years I have been doing SR everything Nobel Laureate economists Paul Krugman and Joseph Stiglitz have said about the economy has proven to be correct. By now it should be obvious to anyone who actually cares about facts, that the Rightist Randian economic theories and policies are both intellectually and morally bankrupt.
Read this article carefully, click through to see the charts, then go back and search SR's archives for the interview with Siglitz I published a few days ago. That is what we should be doing. If the Ryan Plan were ever enacted it would plunge the world into a depression greater than that of the 30s. Yet millions of Americans will vote for Romney. So if those of us who care about national wellness don't vote for Obama, as bad as he is on many issues, we will watch our world crumble. Not voting is the same as a Republican vote. Once again, this is not about politicial partisanship as that is usually defined. It is about facts.
The depression we’re in is essentially gratuitous: we don’t need to be suffering so much pain and destroying so many lives. We could end it both more easily and more quickly than anyone imagines-anyone, that is, except those who have actually studied the economics of depressed economies and the historical evidence on how policies work in such economies.
The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending. Never mind all the talk of how we have a long-run problem that can’t have a short-run solution-this may sound sophisticated, but it isn’t. With a boost in spending, we could be back to more or less full employment faster than anyone imagines.
But don’t we have to worry about long-run budget deficits? Keynes wrote that ‘the boom, not the slump, is the time for austerity.
