Paul Krugman is right

Paul Krugman and fellow Nobel Prize winning economist Joseph Stiglitz have been saying for years that austerity and focusing on deficits actually do harm in an economy such as our present one.

I have no trouble understanding that -- it's all about needing to create jobs and thus increasing buying power for the people, which then leads to increased production and more jobs.   But few people in our government seem to understand this.  I think President Obama does, but he has felt constrained by what he thinks he can get conservatives to accept.   Or perhaps he had the wrong advisers and just couldn't sell the idea.

Now the Congressional Budget Office has issued a report that says deficit reduction measures have stymied the recovery.  And yet politicians, mostly Republicans but also some Democrats, continue to call for austerity.

And this is despite the bad results in Europe where they've gone into severe austerity measures.

The CBO report cites fiscal tightening, such as the expiration of the 2% cut in Social Security payroll tax and reductions in federal spending, as leading to slowed economic growth.

". . .  subdued economic growth will limit businesses' need to hire additional workers, thereby causing the unemployment rate to stay near 8 percent this year."

What we need instead, as Krugman and Stiglitz keep trying to tell us, are a robust jobs programs and governmental spending to stimulate growth.   Providing jobs and other measures that give people more buying power is the way to stimulate the economy, not the reverse.

Why is this so hard to understand?

Ralph