I follow Krugman’s every word. I think he’s correct in that comparing a family budget to the role of government is an idiotic comparison of apples vs. oranges. Government does have a role in helping the markets and austerity is not the answer.
So here’s what I don’t get. The Great Depression wasn’t that long ago. Our parents and grandparents experienced first hand the horrors. But there’s a happy ending, right? It took 10 years, but FDR and The New Deal helped save the day. Government played a role in priming the pump, creating a jobs ‘multiplier-effect’. It can’t be over-stated the importance of changing the ‘psyche’ of the country. The same is true for The Great Recession. Nothing gets moving unless people are prospering in their careers. Companies aren’t in a hiring mood, banks don’t loan money, and people can’t buy houses unless the collective psyche is on the up-swing. Putting the Government on a diet doesn’t help with that.
John Maynard Keynes was right. Krugman is right. What is it that people don’t get about this that makes them side with Tea Party loons like Glenn Beck and Rush Limbaugh that austerity is the answer?
Enter 2008 and the housing bubble. The shit hits the proverbial fan and the economy is on the verge of collapse. Government must enter. Even the Republicans know this and support massive stimulus. They have no other choice at this point and finger pointing about who caused the problem won’t solve anything.
The problem I have is that I’m feeling a little ripped off. FDR and the PWA put people to work on airports, hospitals, schools, roads, bridges, and dams. There’s ample ‘physical’ evidence of how the New Deal helped pull us out of the Great Depression in The Lincoln Tunnel, Grand Coulee Dam, The Pennsylvania Railroad. Even Timberline Lodge in Oregon is a symbol of government’s role in getting people back to work.
With the stimulus that was spent on the Great Recession, where’s my physical evidence? Where are the bridges? Where and the new roads? Where are the energy projects? The sad truth is, the money got spent to save the banks so there is no physical evidence.
Perhaps I’m being too harsh. There is some physical evidence.