Trying to fix the economy with budget cuts reminds Paul Krugman of an outdated medical practice: bleeding patients. This “economic bloodletting” is supposed to boost confidence, but it's a cure that just makes things worse. "Somehow, businesses and consumers seem much more concerned about the lack of customers and jobs, respectively, than they are reassured by the fiscal righteousness of their governments,” Krugman writes in the New York Times.
Deficit hawks will tell you we need to focus on the long term—but it’s becoming clear that our short-term troubles are worsening our long-term outlook. Manufacturing, for example, is shrinking, which will mean too-quick “capacity constraints and production bottlenecks” once the economy finally gets back on track. In short, “we need a major push to get the economy moving, not at some future date, but right now,” with “more, not less, government spending.” But the tough part is convincing the power players “they’ve spent the last year and a half going in exactly the wrong direction.” Click through for Krugman’s full column.