Those deficit hawks who've been clamoring for the reduction of America's debt are in an odd position now that the "fiscal cliff" may help them get what they want, according to Paul Krugman.
The Nobel-prize winning economist and New York Times columnist wrote in a blog post that the combination of tax hikes and spending cuts set to take effect next year is causing "a lot of squirming" among those who he says now "have to find a way to say that this is a bad thing" after repeatedly calling for deficit reduction. So far, deficit hawks have claimed that the "fiscal cliff" cuts in spending are too abrupt or are simply "the wrong kind of reduction," but their most recent idea is the worst yet, Krugman writes.
A report from the Committee for a Responsible Federal Budget has called for the cuts to focus on "low-priority spending," or in Krugman's words, services to the poor and middle class.
Krugman's stance on reducing the deficit is no secret. He has repeatedly argued that it should not be the economy's top priority, as such measures would result in austerity and possibly cause the economy to slip back into recession. He has written that the "the public really doesn't care" about the deficit, a stance that caused CNBC's Becky Quick to call Krugman "dangerous."
But Krugman has also argued that the "fiscal cliff" presents an opportunity for President Barack Obama to stand his ground in the face of GOP obstructionism, even urging Obama to "go over the cliff if necessary."
However, that may be a risky choice. A recent report found that if Congress fails to take action to alleviate the "fiscal cliff" spending cuts and tax hikes, the impact "could be worse" than expected.
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