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‘Destructive’ Budget Deal Has Long-Term Repercussions
Posted at 8:20 a.m. on Dec. 16, 2013
Paul Krugman writes that the unemployed are the losers from the current Congressional budget deal.
“If you look at what has happened since Republicans took control of the House of Representatives in 2010 — what you see is a triumph of anti-government ideology that has had enormously destructive effects on American workers.”
Contrary to the common assumption of an “enormous growth in government,” Krugman shows how “we’ve been living through an era of unprecedented government downsizing,” coupled with a sharp drop – “a collapse” – in public investment.
The repercussions of these cuts, are enormous: “Under these conditions, government cutbacks simply swelled the ranks of the unemployed — and as family incomes fell, so did consumer spending, compounding the damage … Those cuts in government spending are the main reason we still have high unemployment.”
“If you look at my list of major areas that were cut, you’ll notice that they mainly involve investing in the future … We’re also looking at a long-term degradation of our prospects, reinforced by the corrosive effects of sustained high unemployment.”