Posted on 08/29/2009 9:43:34 PM PDT by Lorianne
So new budget projections show a cumulative deficit of $9 trillion over the next decade. According to many commentators, that's a terrifying number, requiring drastic action — in particular, of course, canceling efforts to boost the economy and calling off health care reform.
The truth is more complicated and less frightening. Right now deficits are actually helping the economy. In fact, deficits here and in other major economies saved the world from a much deeper slump. The longer-term outlook is worrying, but it's not catastrophic.
The only real reason for concern is political. The United States can deal with its debts if politicians of both parties are, in the end, willing to show at least a bit of maturity. Need I say more?
Let's start with the effects of this year's deficit. There are two main reasons for the surge in red ink. First, the recession has led both to a sharp drop in tax receipts and to increased spending on unemployment insurance and other safety-net programs. Second, there have been large outlays on financial rescues. These are counted as part of the deficit, although the government is acquiring assets in the process and will eventually get at least part of its money back. What this tells us is that right now it's good to run a deficit. Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It's a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression.
As I said, deficits saved the world.
(Excerpt) Read more at chron.com ...
I guess he forgot to add the “barf alert”.
I was too stunned reading it to remember how to barf.
There's called toxic assets - the exact type of "assets" that banks can't get rid of fast enough.
How many of these liberal rags told us that the Bush deficits or the Reagan deficits were a “good thing”???
There is a reason why the MSM is going broke, and it is not just the economy!
Timothy Leary would be proud of this ditz! Yes... eating feces and drinking urine is actually good for you... blah, blah, blah...
IMHO, Krugman is in serious need of help. He needs to get help with that “tingle.”
Marxist first, wrapped in the thin veil of an economist.
It like saying, because your burning up with fever from the flu, you should sit on a block of ice too cool yourself.
Krugman refuses to consider how the financial institutions got in trouble in the first place. It's as if depressions just blow in out of a cloud every now and then.
The author fails to realize how anti-growth Mr Obama’s economic policies are. Any other time, with nearly any other president, it might work to borrow some to pull though hard times, realizing that once America is up to full stem, we could pay off that debt with our monsterous economic machine.
However, as Mr Obama is hellbent on Socializing our nation, there won’t be an economic monster ready to step up and pay down that debt. Next year, when forecasting the debt to 2020, it’ll be revised up to something like $12 trillion instead of “only” the $9 trillion forecast now until 2019. Count on it!
Would you trust this guy?!
As a Texan I’d like to apologize for Houston. They’re like Austin, only much dumber.
Deficits are not necessarily bad, and I think Krugman is right in that deficits can be used to temporarily prop up economic activity. It’s true that government might need to occasionally spend more than it receives in taxes, like during national emergencies.
It’s a matter of degree. How deep in debt can we afford to go and for how long? At some point, the deficits can start doing more damage than good. The problem is how the money is spent and what policies brought us to the point where our leaders chose massive deficits in an attempt to “save the economy.”
Does anyone seriously believe the jokers presently running our government are going to have the discipline to fix these deficits and halt out-of-control government spending in the future? I wouldn’t bet on it.
I think I saw her at a party in college, but I don’t remember.
Note the A-hat fails to consider Tax Cuts, the only way out of this mess.
Sounds like a bloody Monty Python skit.
So if I lose my job and am in debt, the best thing I should do is go out and max out my credit cards? Krugman is an idiot.
Hey... The Houston Chronicle is loaded with great Economists! Just how in the world can you disagree with them?
Anyway, when all of this falls apart - who is going to blame them for this? Not me...I will be trying to survive...
I can make the payments but I don't know if I will be able to buy fuel.
I got unemployement checks coming every week maybe Obama will get me a raise.... Maybe.............Maybe tax revenue grows on trees?...........I think I am stroking out here.
You are giving prop for a f****** socialist like Krugman who only thinks deficit is good because a socialist President is doing it and spending trillions of dollars on socialist and welfare causes. Did the asshole think that the much smaller deficit under President Bush was good? Of course not.
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