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? “
…yessir, if we had only listened to Paul Krugman and spent those mega-bucks on TARP and Stimulus we’d only have an unemployment rate of 8 percent, tops. Oh, that’s right, we did spend trillions on everything Krugman suggested and besides being bankrupt we have a jobless rate in the double-digits. Well, Krugman sure sounded like he knew what he was talking about. Damn Keynesians…
Ice Bandit your statement — “We did spend trillions on everything Krugman suggested” — is inaccurate. Krugman, in fact, wanted something much larger and much different.
“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? (Paul Krugman)
…don’tcha’ hate it when folks who get sent to Washington by a pissed off electorate do what they said they were gonna’ do? The nerve of those people…
Now that the electorate better understands how this hard core group thinks, it will be interesting to see how many of this group will be reelected in 2012. According to polls, some are too far out even for the Republican base. It looks like some, like Jim Jordon, might be pushed out by the Republican Party before the election even happens.
Taxing the rich even more would have very little effect on revenue. This from the Daily Mail:
Soak the rich, eh?
They do not have the money.
A report from the Internal Revenue Service found that the rich — 8,274 people with incomes of $10 million per year or more — earned a total of $240 billion in 2009.
Even of you confiscated every dime they earned, you would barely have enough money to cover government spending for 24 days.
Of course, about a quarter of that money already goes to the federal government for federal income. So make that 18 days.
Another 227,000 people earned $1 million or more in 2009.
Millionaires averaged taxes of 24.4% of their income — up from 23.1% in 2008.
They, too, did not earn enough money to come anywhere close to covering the annual deficits that are $1.5 trillion a year.
Barack Obama was the first president to sign a budget with a $1 trillion deficit into law.
In fact, all the taxpayers — including the ones who get a refund check bigger than the withholding taxes they paid — have the money.
From Reuters: “Total adjusted gross income reported on tax returns, measured in 2009 dollars, was $7.626 trillion, down from $8.233 trillion in 2008 and $8.989 trillion in 2007. Total adjusted gross income was up only slightly from the $7.475 trillion reported in 2001, when there were 10 million fewer taxpayers. Adjusted gross income is the amount on the last line of the front page of a Form 1040 tax return.”
Individual tax collections totaled $1,175,422,000,000 in 2009 — or 15.4% of all income.
Doubling federal income taxes for everyone would still leave us $400 billion or so shy of balancing the budget.
We must cut. We cannot afford to buy everything we want.