Paul Krugman, the winner of the Nobel Economics Prize, columnist for the New York Times, and Professor at Princeton University, has written a new book about how to deal with the American “Depression”, as he calls the Great Recession.
Just suggesting that we are going through a depression is a stunning statement, but Krugman, despite attacks from conservatives, Republicans, and Texas Congressman Ron Paul and his libertarian views, is correct in stating that austerity, being pursued in Great Britain and elsewhere in Europe in a way that has led to a worsening economic condition throughout the continent, is absolutely the wrong thing to do at this time.
The time for cutting spending is when there is a booming economy, not an economy with millions of people unemployed, and attempts being made to cut back the social safety net for desperate people. As Krugman writes, it is John Maynard Keynes, whose ideas helped Franklin D. Roosevelt during the Great Depression, who needs to be followed today.
After all, even Richard Nixon said he was a Keynesian when he decided to impose wage and price controls in the 1970s, and it was Keynesian ideas that helped Gerald Ford and Ronald Reagan during the two worse economic downturns in the 1970s and 1980s since the end of the Great Depression until those time periods!
So Krugman advocates much more government intervention and spending than Barack Obama was able to get through Congress in 2009, and argues that had more been done then and since, our economic condition would be far better than it is now.
There may be skeptics, and certainly Ron Paul supporters live in their own parallel universe, but Paul Krugman needs to be listened to, and followed, hopefully, by a Democratic controlled Congress in 2013 and after!