In a NYT article, “The President Surrenders,” Nobel winning economist Paul Krugman calls the debt deal an “abject surrender on the part of the president.” He calls it, “a catastrophe on multiple levels.” He says it is, “a disaster for the nation”:
- It will damage an already depressed economy;
- It will probably make America’s long-run deficit problem worse, not better;
- By demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.
Krugman says, “Those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker. … The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further.”
Krugman seems thoroughly disappointed with President Obama. He writes, “Republicans will surely be emboldened by the way Mr. Obama keeps folding in the face of their threats. He surrendered last December, extending all the Bush tax cuts; he surrendered in the spring when they threatened to shut down the government; and he has now surrendered on a grand scale to raw extortion over the debt ceiling. Maybe it’s just me, but I see a pattern here.”
Krugman says, “What Republicans have just gotten away with calls our whole system of government into question. After all, how can American democracy work if whichever party is most prepared to be ruthless, to threaten the nation’s economic security, gets to dictate policy? “
