And you know that's exactly what's going to happen. Says the Professor, short and not so sweet:
The economic news has been better lately. ... It’s too bad that so many people, mainly on the political right, want to send us sliding right back down again.Krugman explains:
Some economists expected a rapid bounce-back once we were past the acute phase of the financial crisis — what I think of as the oh-God-we’re-all-gonna-die period — which lasted roughly from September 2008 to March 2009. But that was never in the cards. The bubble economy of the Bush years left many Americans with too much debt; once the bubble burst, consumers were forced to cut back, and it was inevitably going to take them time to repair their finances. And business investment was bound to be depressed, too. Why add to capacity when consumer demand is weak and you aren’t using the factories and office buildings you have?And while things are coming back, there's potential trouble ahead, including rising oil and food prices, and the risk that the Fed and other central banks will "mistakenly respond to higher headline inflation by raising interest rates."
The clear and present danger to recovery, however, comes from politics — specifically, the demand from House Republicans that the government immediately slash spending on infant nutrition, disease control, clean water and more. ... Over the next few weeks, House Republicans will try to blackmail the Obama administration into accepting their proposed spending cuts, using the threat of a government shutdown. They’ll claim that those cuts would be good for America in both the short term and the long term.Country first, right? At some point, you'd think the country would figure it out. It's not about the economy. It's about power, just like it always is with these guys.
But the truth is exactly the reverse: Republicans have managed to come up with spending cuts that would do double duty, both undermining America’s future and threatening to abort a nascent economic recovery. [emphasis added]
GP
