Friday, October 10, 2014

Its Time To Say Goodbye To Fiscal Hysteria In The US

Paul Krugman points out that the US deficit is 2.8% of GDP.  That is below the statutory level that has been set for the EZ.  That should be good news for the fiscal hawks but its really bad news for them.  That is because they have been using the budget deficit as a justification for cuts in social welfare programs.  They were very vocal when the deficit was higher earlier in the recession.  Not surprisingly, they have been silent about the improvement in the deficit.  The media are part of the problem.  They made the deficit a big deal, but most of them have failed to inform the public about the decline in the deficit.  The great majority of Americans still believe that the deficit continues to rise under Obama.  Unfortunately, the real problems in our economy have ignored because budget deficits were turned into out most important economic problem. 

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