Krugman: Obama's Economic Cautiousness Could Cost Dems In 2010

New York Times:

The president, then, having failed to exploit his early opportunities, is pinned down in his too-small beachhead.

If the Democrats lose badly in the midterms, the talking heads will say that Mr. Obama tried to do too much, this is a center-right nation, and so on. But the truth is that Mr. Obama put his agenda at risk by doing too little. The fateful decision, early this year, to go for economic half-measures may haunt Democrats for years to come.

Read the whole story: New York Times

Comments

[LunaPark]

There is a limit to borrowing. The day of reckoning is here. The deficit cannot be deferred another decade. It 's too large. The interest payments on the debt are approaching 50% of tax revenues. This is money flowing out of the country. The dollar has lost 15% of its value over the last year. How are we going to pay for an even bigger stimulus Mr. Krugman?

[Jannsmoor]

You perfectly describe why the Bush tax cuts for the wealthy was such a HUGE mistake. He was handed a budget surplus and should have been paying down the deficit instead of running up the greatest debt in history.

Now, we are on a down cycle due to Bush's deregulation and degovernment mentality. Having spent all the money, Bush's long term agenda succeeds if people like you are confined by his debts. Was that his plan all along?

When you argue for not rescuing the economy, you need to discuss the America you envision, because if government did not step in unemployment would be 25%, we would have soup lines and tent cities, and be looking forward to 10 years of depression.

Krugman is exactly right. The measures were too small.

[LunaPark]

I agree. I don't know which is worse, Bush tax cuts or Bush's war. They were both epic blunders. But now, we are looking at 40% of tax revenue going towards interest payments on the debt, ~$383 billion. You could fund 20 NASAs from the interest payment alone. And we want to add to the debt!?

We need to cut government spending and balance the budget. Start by bringing our troops home from the 130 countries around the world we are currently in. We need to half the defence budget and rethink our insane foreign policy. We need to revisit the medicare drug program that is basically corporate welfare for the drug companies.

[ILibertine]

Precisely. I doubt Krugman is arguing spending for the sake of debt creation. Yet economic hard times are when government should spend - as opposed to huge tax giveaways during relative booms and the luxury of protracted wars. And spending needs to be more accurately placed. We are firing our economic shots with about the same degree of accuracy that we have fired our political and strategic shots in the middle east. The current system seems like an old, greedy dog unable to learn the tricks necessary for the new day.

[cuzkate]

Currently WE DO have Tent Cities and long, long soup/any food lines.
I agree with your assessment of our situation but what is being
ignored by the nation as a whole are these horrible tents that our
fellow citizens face every day and every night.

[IndependentMeans]

Everyone warned of this when Bush cut taxes and preceded to involve us in two wars. An impossible situation. Bush did this...........and now we are paying for HIS mistakes. And again, HE was warned and disregarded common sense.

[askmeificare]

So, deficits and debt only started occurring under dubya? The govmt has been screwing us for decades

[S1m0n]

So could doing what Krugman wants.

[swift goat pet for truth]

As a progressive, I would rather lose being bold than lose being timid.

Good policy is good politics.

If progressives lose on good policy, it will not be the first time.
Progressives lost on LBJ's Civil Rights.
Progressive lost on Clinton's tax hike.
But it was the right policy.

[ChelseaC]

Swift goat pet,
Very, very, well stated.
I'm a fan of yours.

[Jannsmoor]

Are you suggesting that a healthier economy with higher debt would be more dangerous for Progressives than an anemic economy with lower debt? Is that what you study of political history indicates? Do you have any analysis to back it up?

[TJCole]

Obama had a great example to follow FDR, instead he went with Timothy Geithner...go figure..?

[ILibertine]

Wow! Talk about critical forks in the road.

[jmpurser]

I think by the time he signs off on the "health care reform bill" there will be way too many suspects in the "What Obama did that cost the Democrats congress and the White House!" contest.

Of COURSE I expected the Democrats to eventually lose all they gained. They're the Democrats. It's what they do. But given the truly horrific last 8 years I had NO CONCEPT that Obama could throw every advantage out in less than a year.

[ChelseaC]

jmpurser,
I agree.

[talkitreal]

The Democrats may be cautious, BUT at least they are doing something! The Democrats are making an effort ot solve problems!

THE Republicans, on the other hand, have done NOTHING!!!! The Republicans voted AGAINST the Stimulus package!! The Republican have ZERO ideas of how to solve any of the problems the country faces! The Republicans have NO SOLUTIONS!

[jmpurser]

No, they're really not. They're making an effort to pump tax dollars into private corporations with no regard to how it affects the nation.

The Democrats have taken over for the GOP as the corporate party in power.

[swift goat pet for truth]

Dems are looking too much at politics, when they should be looking at policy.

Good policy is good politics.

[ILibertine]

I wish I shared that sense of confidence. I think Democratic politicians are making an effort ..... to appear as if they are making an effort while actually not upsetting any apple carts in the process, especially if the apples are for their campaign funds; with big self-congratulatory smiles all the while. I agree with you re: Republican accomplishments, or lack thereof. But what a basis for comparison - we're stuck between two lowest common denominators.

[cuzkate]

Neither Party has a band aid or an Asprin!

[rainbowblue]

He's right. FDR didn't win four terms because people enjoyed his fire side chats. The irony back than was that FDR was playing it safe, while he expanded the Federal government, he didn't do it large enough for the economy to recover (afterall it took WWII for that). I believe Obama didn't study to hard in American history classes and any poli sci classes he took in school. He doesn't seem to understand that the idea that "America is center right/left, swings like a pendulum" arguments aren't really vaild. Instead, Americans value/trust action and whatever action gets results is what they vote for. Hoover did nothing, Americans voted for FDR. FDR took action and was rewarded four terms. LBJ couldn't end Vietnam and was kicked out, Nixon was brought in because he claimed he could end it. Carter couldn't get the economy out of the mud and bring back embassy workers, he was kicked out and Regan was brought in. Obama and the Dems will get kicked out if they think the American public cares about ideology, they only care about results, and so far their results have been timid.

[oneputtsteven]

Spot on. The heck with bi-partinship. At least the GOP understands that, thay's why they throw sand in the gears everytime they get the chance. The stimulus was to small and had to much in tax cuts. Tax cuts don't build bridges. The tax cuts would go mostly to the private sector, which was going to cut jobs, regardless. While more spending, especially spending on infrastructure would have created/saved more jobs.

[bluguy8]

so who is it going to help ? it sure as hell isn't going to help the GOP

[mamacat]

I think Prof. Krugman is right. I recall that Obama wanted a bigger stimulus package, one that included aide for strapped state budgets, but the Dems caved to Republican complaints.

[talkitreal]

The Stimulus package did have aide for strapped states budgest - That is how the states were able to keep millions of teachers employed, keep millions of police officers employed, firefighters, and social workers, as well as nurses employed, as well. It is Stimulus Package money, aide to 50 states that helped save the jobs of millions of teachers, police officers, firefighters, social workers, , all across the country - in every state.

[jmpurser]

No, Obama put the ceiling on the stimulus package and wound up getting what he wanted including the portion that was wasted on tax cuts.

[CommunistUtopia]

Cautious? This is the most hard hard Marxist agenda we have ever seen in the USA. Obama is reckless and these policies are ruining the economy.

[TheBaffler]

His economic policy differs not a whit from Bush's. Do you believe your own hysterical l.ies, or just expect others to?

[nomobull]

the latter

[ChelseaC]

Obama is akin to Bush3.

[jmpurser]

Either you have no idea what the words you just used mean or you have no connection to reality.

[swift goat pet for truth]

well... um...

Yes.

[econ1]

Sure, we need more tax credits for home buyers....even the NYT says it is ridiculous. A great hand out to the real estate lobby that will do nothing for the economy.

More cash for clunkers, more bank bailouts, more loans to friends with car companies.

The people who are getting the shaft are ones that worked, saved, and spent within their means.

Now it is spend whatever you have so you qualify for some subsidy, bet the farm on a house you can't afford or a financial bet that if it goes wrong will get you bailed out by the government.

[vonPinto]

I am happy that he himself is not even immune to that take down.

I laugh when Democrats describe their defeat at NJ and Virginia governorship elections solely on "Independents" and Republican turn outs.

The Dem. voters and Progressives simply did not turn out to vote. There was no optimism or reason for them to. I did not even go to vote in my own local elections for the same reasons.

Pres. Obama is turning out to be cautious to a fault. He preaches "bold" actions but acts with a wimp.

[nomobull]

love how you don't even acknowledge the loss of two seats in congress -you know where they make the decisions that effect the WHOLE country.

[vonPinto]

I welcome the two seats the Dems. won. To me, it is even more important than a governorship office.

I just wish my President will bark and bite sometimes.

[oonamanoona]

Governorships are local with local issues. You might want to take a look at VA's history -- they eat Governors. Congressional elections concern the nation as a whole. I'm pretty sure you're not a Libertarian so that explanation should suffice (but I'm sure it won't).

[vonPinto]

Libertarian? No way. I am a staunch Independent but Progressive Obama supporter who is sometimes rattled by how over cautious my President is.

He needs to kick some GOP and Blue dog @sses sometimes to get things done. He is not dealing with very reasonable crowd in the Congress.

Get my point?

[dizmo4]

This is why democrats lose.

Because President Obama isn't 100% perfect and hasn't addressed 100% of progressives concerns, you bail on him.
So liberal democrats lose elections and the party becomes dominated by conservative democrats. Then the next time there is a liberal dem in power, they are hamstringed by conservative Democrats in key positions. Liberals then whine and complain about not getting enough done, they stay home and the cycle repeats.

So by all means, go ahead and stay home in 2010. Throw up your hands and walk away because Obama isn't perfect. See how well you do with Speaker Boehner and Majority Leader Bachmen.

[MyNameIsJames]

Great comments by Krugman. The Obama administration was warned that the 700 Billion Stimulas was not enough especially with about 25% being tax breaks.

Now those chickens are coming home to roost!

[vonPinto]

It is not just the size of the stimulus but where and how it is being used. Pres. Obama seem to have forgotten that he promised to build the middle class (which is the real and heart beat of America) from bottoms up.

Now, the emphasis seem to only be on the economic warlords on Wall Street. I just hope he has some joker he wants to play up his chest, otherwise, the Dems are going down.

[stell]

Isn't it more like one-third tax breaks?

[oneputtsteven]

The stimulus was 60% spending 40% tax cuts because of the 60/40 Senate split with Dems/Republicans. Get it the stupid logic. Obama let them get away with it. It STARTED 75/25.
Then to get 3 freakin GOP votes they change it.

[4TJefferson]

Wow! For eight years goopers let BushCo run over the constitution with Wars, Wiretaps, Katrina, UnPatriotic Act, etc. etc. etc. with absolutely no - I repeat NO OVERSIGHT - ZERO! Now the goopers suddenly all want to know what kind of mustard Barack uses on his hamburgers and what type of toilet paper he is using! Give me a break. Crock tears!

[Whinger]

Your comments are kinda cautious Paul, can't you be more certain?