Krugman declares that is it conservative economic policies that will turn the United States into Greece.
Paul Krugman's blog has been an essential source of smart analysis on the Greek economy as the tension increases with German leaders and the European Union.
"It's now clear, or should be clear, that the Greek program was doomed to failure without major debt relief; no matter how hard the Greeks tried, austerity would shrink GDP faster than it reduced debt relative to the baseline," he writes.
But a new post also ties what's happening in Greece — what he's dubbed the Eurodebacle — back to America, and debunks all the GOP talking points in the process.
(T)here's a broader lesson from Greece that is relevant to all of us — and it's not the usual one about mending our free-spending ways lest we become Greece, Greece I tell you. What we learn, instead, is that fiscal austerity plus hard money is a deeply toxic mix. The fiscal austerity depresses the economy, and pushes it toward deflation; if it's accompanied by hard money (in Greece's case the euro, but a fixed exchange rate, a gold standard, or any kind of obsessive fear of inflation would do the trick), the result is not just a depression and deflation, but quite likely a failure even to reduce the debt ratio.
Krugman doesn’t even mention the huge state transfer of income from workers to retirees or that avoiding taxes is a national sport in Greece.
But hey, we are doing SO well, here, why let fuddy-duddy “live within your means” Conservatives harsh your mellow? Stay calm and let Uncle Sam take care you.
We are all Julia, now.