Cassandranomics: 2012 is Gonna Be Ugly

Krugman advises: Forget the stimulus-as-jump-start metaphor, ok? In fact, forget any metaphor and look straight at the money.

1) The economy is depressed because American households are paying down the excess debt they ran up in the bubble years.

2) Since households can’t spend, the government should. (Please: no false indignation; yes, there is a deficit, and yes, we should reduce it; but we can reduce the deficit by growing the economy which brings in more revenue.)

3) But this stimulus is not sustained, and will provide only a short term boost, while leaving the long-term problem of the enormous tax break to the very wealthy.

4) Oh, and by the way, it will expire just in time for the 2012 elections.

Krugman says it better, of course, with numbers: Block Those Economic Metaphors

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