Paul Krugman is Eric Claption

We’re told that we have no choice, that basic government functions — essential services that have been provided for generations — are no longer affordable. And it’s true that state and local governments, hit hard by the recession, are cash-strapped. But they wouldn’t be quite as cash-strapped if their politicians were willing to consider at least some tax increases.

And the federal government, which can sell inflation-protected long-term bonds at an interest rate of only 1.04 percent, isn’t cash-strapped at all. It could and should be offering aid to local governments, to protect the future of our infrastructure and our children.

But Washington is providing only a trickle of help, and even that grudgingly. We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

When I seek clarity, I turn to Eric Clapton and Paul Krugman. Crusader AXE is not sure if Paul Krugman can play guitar, but he is the Economics Equivalent of Clapton with the Bluesbreakers -- God. It's fairly simple, and people who claim to believe in American Exceptionalism need to pay attention. If 90% of the money is in the hands of 2%, go where the money is. Roads, schools, power grids, infrastructure cost money. Spending money on roads, schools, power grids, infrastructure provide jobs. Jobs provide tax revenue. No jobs, no tax revenue. No tax revenue, no jobs, no purchasing. If the roads revert to gravel, no new car sales. If there is no electricity, no computer networks. Visit the local mall and find the mall manager. Ask them what happens if they lose power...for a week. No stores open. No jobs. Perishable goods spoil. Vandals break in and steal. Wild dogs run amuck on the food court. Zombies haunt the aisles...seeking brains and Ralph Lauren camisoles...

The idiots in charge of obstruction -- Mitch McConnell, John Boehner, Ben Nelson -- need to get off their dead asses and get their heads in the game. What exactly are they planning to do to govern?

Krugman points out clearly and lucidly why they need to and what they could do. I think it's time for the Democratic wing of the Democratic party to endorse things like a living wage, debt forgiveness for underwater housing, extended assistance to states, and some real draconian responses to those who move work off-shore to increase profit. Adam Smith's wine and needle analogy was correct in so far as it goes -- a world where the needle manufacturer could move to lower Abyssinia and have Rasselas manage the equivalent of an off-shore sweatshop never occurred to him as a possibility. Smith understood what Warren Christopher reminded us of in 1993 and we have forgotten -- American National Security includes and is inescapably linked to Economic Security.

Let the Nobel Prize Winner have the last word...

How did we get to this point? It’s the logical consequence of three decades of anti-government rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

The antigovernment campaign has always been phrased in terms of opposition to waste and fraud — to checks sent to welfare queens driving Cadillacs, to vast armies of bureaucrats uselessly pushing paper around. But those were myths, of course; there was never remotely as much waste and fraud as the right claimed. And now that the campaign has reached fruition, we’re seeing what was actually in the firing line: services that everyone except the very rich need, services that government must provide or nobody will, like lighted streets, drivable roads and decent schooling for the public as a whole.

So the end result of the long campaign against government is that we’ve taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.

Comments

[Brian M]

Somehow this opposition to Big Gubmint never turns its beady eye onto the vast, creaking military-industrial machine.