Friday, June 15, 2012

Mitt Romney vs. Paul Krugman: No Contest



The other day, Romney said:
 “[Obama] says we need more firemen, more policemen, more teachers.” Then he declared, “It’s time for us to cut back on government and help the American people.”
But is it time? Does this hurt or help people? Paul Krugman has the answer:
First of all, there’s our own experience. Conservatives would have you believe that our disappointing economic performance has somehow been caused by excessive government spending, which crowds out private job creation. But the reality is that private-sector job growth has more or less matched the recoveries from the last two recessions; the big difference this time is an unprecedented fall in public employment, which is now about 1.4 million jobs less than it would be if it had grown as fast as it did under President George W. Bush. 
And, if we had those extra jobs, the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.
So, let me get this straight: the loss in jobs = more than a percentage point in lower employment? Why doesn't the Obama administration use this data? The truth is that fewer people with jobs mean lower spending and less demand for goods and services, so the economy remains depressed. And how did austerity work out in, say, Ireland, where “The Irish economy is showing encouraging signs of recovery,” as the Cato Institute declared two years ago? Paul has that answer too:






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