" The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. " - Paul Krugman
In the debate over austerity against the 99 percent in the USA Paul Krugman plays the role of good cop or soft cop. The whole "debate" really is not about whether to give this "medicine" to the powerless, it's about when, how and how much and whether some kind of window dressing i(raising some taxes on some rich people) is appropriate or not.
Krugman takes the "not so much now" viewpoint.
For on thing in stating his case for more money from the Fed Paul dismisses current inflation and shows that he has no notion of how a family of two parents and two kids eat and do all the things they need to do on $50,000 a year, which is pretty ordinary in the USA (not to mention those trying to feed two kids with even less). Food matters, and its cost to many many Americans is significant! I dug this up to show that food prices are continuing to rise:
During the 1991 to 2006 period, U.S. food prices were fairly stable—annual food price inflation, as measured by the Consumer Price Index (CPI) for all food (excluding alcoholic beverages), averaged a relatively low 2.5%. However, several economic factors emerged in late 2005 that began to gradually push market prices higher for both raw agricultural commodities and energy costs, and ultimately retail food prices. U.S. food price inflation increased at a rate of 4% in 2007 and at 5.5% in 2008—the highest since 1990 and well above the general inflation rate of 3.8%.
The situation of sharply rising prices came to a sudden halt in late 2008 when the financial crisis hit U.S. markets leading to a severe economic recession. Annual food price inflation dropped to 1.8% in 2009 and 0.8% in 2010, before rising to 3.7% in 2011 driven by improving U.S. and global economic conditions. USDA projects that annual food price inflation will range from 2.5% to 3.5% in 2012 and rise to 3%-4% in 2013.The All-Food CPI has two components—food-at-home and food-away-from-home. The food-at- home CPI is most representative of retail food prices and is significantly more volatile than the food-away-from-home index. The food-at-home CPI is projected in a range of 3% to 4% for 2013, compared with a 2.5% to 3.5% annual inflation rate for food-away-from home prices. This difference is partially explained by the larger share of farm products in the final price of retail foods than in food-away-from home. Farm product prices are, in general, substantially more volatile than the other marketing and processing costs that enter into retail or ready-to-eat foods.
And rents for living spaces? Up too!
So, for millions of Americans, the forty-seven per cent, and I'd hazard to say the seventy-five percent, inflation is not gone, and it never was. Krugman may have a case to make but it does not serve truth to dismiss rising prices. Given wages and salaries are not going up for most people it's fair to say most of us already are living under austerity!
Now "we" get to the nub of my case against Krugman: He sees austerity as necessary in the future. I disagree. I want those who caused the crisis and the hard times for most of us to be made to pay one hundred cents on the dollar for their folly. I want the 99 percent left out of this future reckoning as most of us are already living through austerity!
And Paul loves that word "we". As though "we" live in a democracy and not in a dictatorship of the one percent! If we were living in a democracy the people who voted for Obama could call the Democratic Party's bluff on jobs, taxes for the rich, control over Wall Street speculation, etc. making them put up or shut up but the system is not a democratic one. We have a gerrymandered Congress where the party that lost the overall popular congressional vote runs Congress. Thanks to stealth Republican (and Mormon) Harry Reid we have de facto a Senate with a ridiculous sixty vote rule that you cannot even find in the slavers' own constitution that leaves the party that lost the election calling much of the shots.