For far too long, we’ve been preoccupied with “the wrong worries,” focusing on the deficit when we should have been working on job creation, writes Paul Krugman in the New York Times. Now we’re seeing the fallout from that misguidedness. “Those plunging interest rates and stock prices say that the markets aren’t worried about either US solvency or inflation. They’re worried about US lack of growth.” Unemployment ballooned between 2007 to 2009, and "you need a lot of job growth to make up the lost ground. And that just hasn’t happened,” Krugman notes.
It needs to happen now, he writes, because here's the truth of the matter: "It's now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery." So how do we get on that path? "The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals" instead of flimsy measures that, at this point, make him "look ridiculous." And "if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing GOP." We don’t know what will work, "but we already know what isn’t working: the economic policy of the past two years." (Read more Paul Krugman stories.)