Newspaper article MinnPost.com

Paul Krugman Is Worried about Democracy

Newspaper article MinnPost.com

Paul Krugman Is Worried about Democracy

Article excerpt

Paul Krugman is sad. Also frustrated. And worried about whether democracy can work if citizens don't know the truth.

Specifically, on the deficit. For years, Krugman has been arguing against deficit hawks. Now is not the time to worry about the deficit, he said many, many times during the Great Recession. Now is the time for stimulus spending to get the economy moving. A recovering economy is the best cure for rising deficit and debt.

Now the economy is well into a long, frustratingly slow recovery (which Krugman believes would have been stronger and faster with more stimulus spending). That recovery (combined with various tax increases and spending cuts) are bringing the deficit down, fairly dramatically.

At its peak at the end of 2009, the record annual deficit of $1.4 trillion equaled a truly scary 10 percent of GDP. The current fiscal year (which ends in September so this doesn't require much of a projection) will be $642 billion or four percent of GDP (it's usually best to measure these things as a percent of GDP). Now that is still a very high deficit by historical standards, but it is also a very, very dramatic drop over the past four years (captured well in this Bloomberg/Business Week graphic.)

And Krugman is feeling kinda vindicated. Except he's bothered that so many people haven't absorbed the good news. He was able to get Google to include a question for him on a fancy survey. Here's what happened:

"So we asked whether the deficit has gone up or down since January 2010. And the results were even worse than in 1996: A majority of those who replied said the deficit has gone up, with more than 40 percent saying that it has gone up a lot. Only 12 percent answered correctly that it has gone down a lot."

In his column, Krugman cites evidence that various Republicans (he cites Eric Cantor and Rand Paul specifically) continue to talk about large, scary, growing deficits, notes with horror that Politifact rated Cantor's statement as "half true", and adds that the supposedly less partisan figures like Simpson and Bowles of Simpson-Bowles Deficit Commission fame continue to warn about the danger of the deficit. …

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