In his latest column for the New York Times, Paul Krugman, the award-winning economist and best-selling author, says that even if Republicans backed off from causing the U.S. to default on its debt, their policies are still harming the economic recovery.
Citing the reduced domestic spending, the rise of the payroll tax, and the slashing of unemployment benefits, Krugman writes, "Elections have consequences, and one consequence of Republican victories in the 2010 midterms has been a still-weak economy when we could and should have been well on the way to full recovery."
Krugman next tries to explain Republicans' behavior, and concludes that a mix of "top-down class warfare" and "bad ideas" have combined to make the Republican Party an impediment to a better economy. "Slashing benefits to the unemployed because you think they have it too easy is cruel even in normal times," Krugman writes, "but it has the side effect of destroying jobs when the economy is already depressed."
We should also acknowledge the power of bad ideas. Back in 2011, triumphant Republicans eagerly adopted the concept, already popular in Europe, of “expansionary austerity” — the notion that cutting spending would actually boost the economy by increasing confidence. Experience since then has thoroughly refuted this concept: Across the advanced world, big spending cuts have been associated with deeper slumps. In fact, the International Monetary Fund eventually issued what amounted to a mea culpa, admitting that it greatly underestimated the harm that spending cuts inflict. As you may have noticed, however, today’s Republicans aren’t big on revising their views in the face of contrary evidence.
Are all the economy’s problems the G.O.P.’s fault? Of course not. President Obama didn’t take a strong enough stand against spending cuts, and the Federal Reserve could have done more to support growth. But most of the blame for the wrong turn we took on economic policy, nonetheless, rests with the extremists and extortionists controlling the House.
Things could have been even worse. This week, we managed to avoid driving off a cliff. But we’re still on the road to nowhere.