Krugman: Large fiscal expansion needed

Update: National Bureau of Economic Research says the U.S. economy fell into a recession last year.

Among the pathological programs pursued by the Bush administration is its enterprise to turn the national debt from prospects made in 2001 of the debt being completely paid off in 10 years to upping the debt to $10 trillion.

'Deficits don't matter,' infamously mumbled Dick Cheney at a high-level meeting that was recalled by former Treasury Secretary Paul O'Neil.

Worse is the wish list that the rightwingers wanted from the future administrations dealing with the massive debt: Eliminating those awful programs like Social Security and Medicaid and Medicare which would become unsustainable because of the debt purposefully piled up by Bush and Cheney.

Nobel Prize-winning Paul Krugman warns today that president-elect Obama should not clean up the fiscal mess immediately in the face of a dangerous recession, and views government spending as a economic imperative to ending the recession:

(C)ircumstances right now are anything but normal. ...

(W)e have a fundamental shortfall in private spending: consumers are rediscovering the virtues of saving at the same moment that businesses, burned by past excesses and hamstrung by the troubles of the financial system, are cutting back on investment. That gap will eventually close, but until it does, government spending must take up the slack. Otherwise, private investment, and the economy as a whole, will plunge even more.

The bottom line, then, is that people who think that fiscal expansion today is bad for future generations have got it exactly wrong. The best course of action, both for today’s workers and for their children, is to do whatever it takes to get this economy on the road to recovery.

Iran War Moves

If you wish to understand how Bush and Company got away with the atrocity of Iraq, observe how the administration's moves against Iran are portrayed on the cover of the London Independent versus your local newspaper, nevermind the network news channels.

We live in a depoliticized, dumbed-down, corporate media society spawning an American public that can believe still that Saddam caused 9/11 (one out of three), and accept its government's statements unquestioningly, with merely a muttered comment.

A vibrant democracy would be alive with indignant cries of: They're doing it again, let's stop them.

But the depoliticalization of the American public, along with its related susceptibility to emotion and image, is an aspect that Bush and Cheney and the whole despicable lot of them know so well.

As Bush took a projected long-term $5-trillion surplus and turned it into projected multi-trillion dollar debt within five years while slashing social service spending, the Cheneys and Roves made a political calculation that they could get away with it without economic dislocations and political costs to the people who matter.

"Reagan proved deficits don't matter," Cheney said, according to former Treasury Secretary Paul O'Neill (Suskind. The Price of Loyality, p. 291). And Bush proved an all-out looting of the U.S. Treasury doesn't matter.

So now as tax cuts for the super-wealthy, public money directed at the high-tech sectors as never before, and war without end is waged, the burden of war falls on a small number of Americans in the armed forces and their families, while profiteering and crony contractor capitalism's fraud remains protected by the Bush administration, as it continues to insist that war is necessary to protect America as a society.

But Cheney is right, you get away with quite a bit; it's up to each American to draw the line at how much squandering the treasury, lying, and killing and maiming our young does matter.

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