Krugman on the current Republican Economic Dystopia - The Jobless Trap

[Bill USA]

Having created the Trickle Down Deregulation disaster, when Obama and the Democrats tried to rebuild the economy the Republicans proceeded to fight them at every turn. The GOP have fought all Obama's economic stimulus efforts saying we must first cut social programs to erase the debt disaster they created (when they were building the public debt they said: "Deficits don't matter.&quot . Thus, the current Republican Economic Dystopia of glacial improvement in unemployment and a lethargic stifled recovery.



http://www.nytimes.com/2013/04/22/opinion/krugman-the-jobless-trap.html?partner=rssnyt&emc=rss&_r=0

F.D.R. told us that the only thing we had to fear was fear itself. But when future historians look back at our monstrously failed response to economic depression, they probably won’t blame fear, per se. Instead, they’ll castigate our leaders for fearing the wrong things.

For the overriding fear driving economic policy has been debt hysteria, fear that unless we slash spending we’ll turn into Greece any day now. After all, haven’t economists proved that economic growth collapses once public debt exceeds 90 percent of G.D.P.?

Well, the famous red line on debt, it turns out, was an artifact of dubious statistics, reinforced by bad arithmetic. And America isn’t and can’t be Greece, because countries that borrow in their own currencies operate under very different rules from those that rely on someone else’s money. After years of repeated warnings that fiscal crisis is just around the corner, the U.S. government can still borrow at incredibly low interest rates.

But while debt fears were and are misguided, there’s a real danger we’ve ignored: the corrosive effect, social and economic, of persistent high unemployment. And even as the case for debt hysteria is collapsing, our worst fears about the damage from long-term unemployment are being confirmed.
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[Doctor_J]

1. I wonder why Dems consider Obama a sap for reaching out