Tuesday, August 10, 2010

Krugman: Conservative Economic Policy Led To The Crumbling Of America

In "America Goes Dark, Paul Krugman connects conservative economic policy with the decline of essential services, including turning off streetlights, returning paved roads to gravel and cutting back on education. But among certain politicians, tax cuts for the wealthy must remain intact. These cuts are directly connected to the loss of services. They're also championed by those who profess concern for the deficit:

We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.

In effect, a large part of our political class is showing its priorities: given the choice between asking the richest 2 percent or so of Americans to go back to paying the tax rates they paid during the Clinton-era boom, or allowing the nation’s foundations to crumble — literally in the case of roads, figuratively in the case of education — they’re choosing the latter.

Conservatives advocate cutting taxes for the wealthy on the grounds that it will stimulate the economy. The financial crash and the decline of the median household income under the Bush years show how dubious that notion is. Also dubious is the idea that the wealthy use their tax savings to immediately start hiring. Actually, one cannot be wealthy without letting most of one's money, as Krugman puts it, "sit idle" in private accounts. That's one reason extending unemployment benefits actually stimulates the economy: the unemployed, who are in debt, spend money.

Krugman correctly states that infrastructure and education are essential to a growing economy, and that, unlike emerging nations, we're going backwards. All of this is the result of decades of conservative rhetoric dedicated to shrinking the government:

How did we get to this point? It’s the logical consequence of three decades of antigovernment rhetoric, rhetoric that has convinced many voters that a dollar collected in taxes is always a dollar wasted, that the public sector can’t do anything right.

The antigovernment campaign has always been phrased in terms of opposition to waste and fraud... And now that the campaign has reached fruition, we’re seeing what was actually in the firing line: services that everyone except the very rich need, services that government must provide or nobody will, like lighted streets, drivable roads and decent schooling for the public as a whole.

So the end result of the long campaign against government is that we’ve taken a disastrously wrong turn. America is now on the unlit, unpaved road to nowhere.

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