Friday, October 18, 2013
The Crisis Is Over In The US But The Enemy Has Not Been Eliminated
Like most of us, Paul Krugman is pleased that the government has been reopened and that we escaped the disaster of a US default on its debt. He reminds us, however, that a lot of damage has already been done to the economy as a result of the Tea Party takeover of the House in 2010. Macroeconomic Advisers calculated the cost at $700 billion of lost output and a 1.4% increase in the unemployment rate. Furthermore, the restoration of government is only temporary. We will have to go through a similar process in the near future when the debt ceiling will have to be raised again. The GOP is still intent upon engaging in class warfare by shifting the tax burden from the wealthy to the middle class and by cutting spending on social welfare programs.