Saturday, July 16, 2011

Economics:  Obama's Rightward Shift

One striking example of [Obama's] rightward shift came in last weekend's presidential address, in which Mr. Obama had this to say about the economics of the budget: Government has to start living within its means, just like families do. We have to cut the spending we can't afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

That's three of the right's favorite economic fallacies in just two sentences. No, the government shouldn't budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn't put the economy on sounder footing. They would reduce growth and raise unemployment. And last but not least, businesses aren't holding back because they lack confidence in government policies; they're holding back because they don't have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

For more, see What Obama Wants by Paul Krugman, July 7, 2011 at NYTimes.com.

1 comment:

dhsloan2970 said...

Krugman, as usual, is selective in his listening. If you only listen to the opening lines of Obama's speeches you would hear materials from the Republican play book, big picture stuff about deficits, living within means, shared sacrifice, etc. Listen further and you will that he isn't going to cut social security or medicare, medicaid, the troops, infrastructure or education and he will increase taxes on the"wealthy". These are anything but right leaning.