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Nobel Economist Paul Krugman contradicts both our Democratic Senators on the Economy and Austerity

by: Zappatero

Tue Jan 08, 2013 at 19:51:56 PM MST

Mark Udall is fond of saying the American economy is like your household economy and should be run with the same principles. Along with some other financial falsehoods, this simplistic idea is still on his official senate webpage:

We can start by reinstating common-sense budgeting practices in the federal government.
Families across the country balance their checkbooks, and they expect the same of our government.

Here's what Nobel Prize-winning Economist Paul Krugman says about that:

An economy is not like a household. A family can decide to spend less and try to earn more.
But in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income.
If everyone tries to slash spending at the same time, incomes will fall -- and unemployment will soar.

That last sentence contradicts Udall's partner in austerity Senator Michael Bennet's claim that we haven't cut spending enough - even though last year's budget deal has already cut $1.5 Trillion from future budgets - and that ~~entitlements~~ defined benefit programs like Social Security and Medicare, that most of us have paid into our entire lives, must be part of the equation.

In the battle of economic ideas on how to finally put this Great Republicans Recession behind us who are you going to believe: a Nobel Prize winning economist or two senators who've been inside the DC Beltway bubble for one year too many?

Zappatero :: Nobel Economist Paul Krugman contradicts both our Democratic Senators on the Economy and Austerity