In “Fiscal Scare Tactics”, Nobel Laureate Paul Krugman writes:
“….To me — and I’m not alone in this — the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. …
“…Well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment…
“Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they’ll have risen to 3.5 percent of G.D.P. How scary is that? It’s about the same as interest costs under the first President Bush…
“Why, then, all the hysteria? The answer is politics.”
WATCHDOG: A wag of the tail. We encourage everyone to read the entire article.
