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Krugman: Government is Refusing to Create Jobs

Tuesday, 12 Jul 2011 10:04 AM

Economist Paul Krugman says government can and should be creating jobs in a depressed economy. "Our failure to create jobs is a choice, not a necessity — a choice rationalized by an ever-shifting set of excuses," Krugman writes in The New York Times.

Delusions of recovery, fears for the stability of the bond market, willingness to blame workers who lost their jobs and the failure of government stimulus to boost job creation are the root causes of inaction, according to Krugman.

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Paul Krugman
(Getty Images photo)
"The economy isn't fixing itself,” says Krugman. “Nor are there real obstacles to government action: both the bond vigilantes and structural unemployment exist only in the imaginations of pundits."

"And if stimulus seems to have failed, it's because it was never actually tried."

Listening to what supposedly serious people say about the economy, you'd think the problem was 'No, we can't,'" says Krugman. But the reality is 'No, we won't.'"

A destructive passivity has overtaken our discourse, Krugman notes.

“Turn on your TV and you’ll see some self-satisfied pundit declaring that nothing much can be done about the economy’s short-run problems (reminder: this 'short run' is now in its fourth year), that we should focus on the long run instead,” he says.

“And every pundit who reinforces that destructive passivity is part of the problem,” he says.

Economist Alan Blinder says that looking behind the latest disastrous jobs report reveals an even bleaker picture.

“If we were at 5 percent unemployment, two bad payroll reports in a row would be of some concern yet tolerable,” Blinder writes in The Wall Street Journal. “But when viewed against the background of 9 percent-plus unemployment, they are catastrophic.”

Immediate government spending cuts would only make things worse, Blinder says, but a new jobs tax cut for companies repatriating their profits could help.

"The operative word here is 'serious,'" Blinder says. "Every day brings new proposals to slash government spending ... (but) those are ways to kill jobs, not create them."

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Economist Paul Krugman says government can and should be creating jobs in a depressed economy. Our failure to create jobs is a choice, not a necessity a choice rationalized by an ever-shifting set of excuses, Krugman writes in The New York Times. Delusions of recovery,...
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2011-04-12
Tuesday, 12 Jul 2011 10:04 AM
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