Noted economist Paul Krugman points out what many others have highlighted, that Washington is focused too heavily on the wrong problem. Legitimate economists the world over have been pointing to the U.S unemployment rate (including the millions who are no longer counted in official statistics), rather than the long term debt, as the real threat to future U.S prosperity. Krugman further points out that the slashing of spending and jobs of the past year (which indirectly shrank the government) is a perfect case study of the problems with GOP economic theory. The private sector has not gone on a hiring binge and the problem of lack of demand has not been addressed.
The fatal distraction
International Herald Tribune
6 Sep 2011
Friday brought two numbers that should have everyone in Washington saying, ‘‘MyGod, what have we done?’’ One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10year U.S. bonds, almost as low as…read more…