Bill Clinton channels Paul Krugman
by David Atkins
I will never fully forgive the Clintons for foisting bank deregulation, NAFTA, the DLC, Alan Greenspan, Dow Jones worship, and a host of other ills on the country. But this is still a welcome change of pace:
The debt problem can’t be solved right now by conventional austerity measures, and that’s why Paul Krugman is right when he keeps talking about all these — everybody that’s tried austerity in a time of no growth has wound up cutting revenues even more than they cut spending because you just get into the downward spiral and drag the country back into recession.
Think Progress has the familiar data:
European countries that have attempted to spur growth by rapidly reducing their deficits have failed to accomplish either goal and have instead driven their economies back into recession. The United Kingdom’s deficit has hardly gotten smaller despite its austerity efforts and the country is on the verge of a triple-dip recession. Greece and Spain both have unemployment rates above 25 percent. Even Germany, Europe’s largest economy, is on the brink of another recession. The Eurozone as a whole slipped back into recession in November and its unemployment rate is at record highs.The cynic in me thinks we'll probably see a bigger embrace of Keynesianism now that it's precious military spending on the line. Even Republicans realize austerity is bad when it comes to the only kind of government spending they love.
Still, politicians in the United States have failed to heed Europe’s warnings, pursuing deficit reduction instead of job growth. Republicans blocked the American Jobs Act, which economists estimated would have spurred growth and created more than a million jobs, and have instead pursued damaging budget cuts that would have the opposite effect even amid evidence that the original American push for stimulus worked better than the European approach.
Still, it's nice to see Bill Clinton explicitly restate the reality that austerity during a recession and weak recovery is wrong and that Krugman is right. President Obama could easily make the same case with no political repercussions. Now would be the perfect time.