Krugman: Proposed Debt Deal Will Cost Jobs And Revenue

Nobel Prize winning economist Paul Krugman is very disappointed with President Obama and the Democrats for allowing the Republicans to control the messaging frame of the debt debate. Krugman warned during his comments on ABC's This Week Sunday morning that the proposed spending cuts in a deal to raise the nation’s debt ceiling would end up hurting the economy.

“These spending cuts are even going to hurt the long-run fiscal position, let alone cause lots of misery, said Krugman on ABC's This Week Sunday morning. Then on top of that, we’ve got these budget cuts, which are entirely — basically the Republicans [saying], ‘We’ll blow up the world economy unless you give us exactly what you want’ and the president said, ‘Okay.’ That’s what happened . . . We’re having a debate in Washington which is all about, ‘we’re going to make this economy worse, but are we going to make it worse on 90% of the Republican’s terms or 100% of the Republican’s terms?’ And the answer is 100%.”

Krugman insisted, “from the perspective of a rational person, in other words, a progressive on this stuff, we shouldn’t be talking about spending cuts at all now.”

Krugman’s grim forecast, as a result of Democratic “compromises” with Republicans, which focus on spending cuts, is that the American economy will experience worsening unemployment and general misery in the future.

DailyBeast: How Republicans Screwed the Pooch

Former Labor Secretary Robert Reich said he could explain the problems with the economy in less than 2 minutes, 15 seconds
—and he did it (with illustrations to boot).

Republicans say they want to save the country from Obama’s reckless spending. But as Paul Begala argues in the editorial below, it’s the GOP’s policies that have driven the nation into the ground.

But too few Democrats—and almost no media commentators—have countered the mendacious right-wing storyline.

Politico published a piece outlining the vast disparity in the ad war over the debt ceiling. Republican-aligned groups have run over $21.2 mil lion in attack ads highlighting Democrats as irresponsible drivers of the national debt, and elevating the debt ceiling as a top priority. Meanwhile, groups on the left have spent only about $30,000 on ads calling out Republican responsibility for the debt.

In this case Republicans broke the budget, but they are making Democrats own it - as usual.

"How Republicans Screwed the Pooch,"
By Paul Begala Published: July 30, 2011 Newsweek/Daily Beast

There it sits, lonely and forlorn on my shelf. A leather-bound copy of the 1999 Budget of the United States of America. A gift from President Clinton to the folks on his team, it was the first balanced budget in decades.

But it wasn't supposed to be the last. Indeed, experts projected surpluses as far as the eye could see. $5.7 trillion in surpluses, to be exact. The surpluses were so strong that deep into the future—in 2009—the entire national debt was going to be zero. For the first time since Andy Jackson was president, the United States of America would not owe a dime.

It didn't quite work out that way, did it?

Debt Ceiling Crisis: America Held Hostage by Republican Party Extremists

By PAUL KRUGMAN Published: July 28, 2011 NYTimes

The facts of the crisis over the debt ceiling aren’t complicated. Republicans have, in effect, taken America hostage, threatening to undermine the economy and disrupt the essential business of government unless they get policy concessions they would never have been able to enact through legislation. And Democrats — who would have been justified in rejecting this extortion altogether — have, in fact, gone a long way toward meeting those Republican demands.