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Friday, December 30, 2011

Lesson from the first Depression-Spend in lean times

Paul Krugman: Governments Should Cut Back In Boom Times, Not Bust
The New York Times

"The boom, not the slump, is the right time for austerity at the Treasury." So declared John Maynard Keynes in 1937, even as F.D.R. was about to prove him right by trying to balance the budget too soon, sending the United States economy -- which had been steadily recovering up to that point -- into a severe recession. Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.

Read the whole story http://www.nytimes.com/2011/12/30/opinion/keynes-was-right.html?_r=2&ref=opinion

1 comment:

  1. Dr. Krugman must get tired of having to write the same column over and over again. But I suppose that's what you have to do until people realize that you're right.

    Unfortunately, the austerity ideology has taken over locally, in the form of Daniels, Henderson, Tietz, and Fleming. These folks are doing it completely backwards while making wrongheaded proclamations about how they're protecting our children and grandchildren. Meanwhile, the suffering of the people NOW needlessly continues.

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