Saturday, April 28, 2012

Austerity U.S.A.

Paul Krugman - again - dismantles the meme of an expanding and frivolously spending government: 

"Disappointing GDP number — we’re not growing fast enough to make any significant headway on reducing the output gap — but hey, no need for further Fed action.

But let’s talk right now about fiscal policy. I wrote this morning about our de facto austerity. Here’s another indicator. Look at government (all levels) purchases of goods and services, that is, actually buying stuff as opposed to transfer payments like Social Security and Medicare. Here’s the past decade:


Obama, far from presiding over a huge expansion of government the way the right claims, has in fact presided over unprecedented austerity, largely driven by cuts at the state and local level. And it’s therefore an amazing triumph of misinformation the way that lackluster economic performance has been interpreted as a failure of government spending."

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