09/10/2012 08:24 am ET Updated Nov 10, 2012

Paul Krugman: Here's How The U.S. Could Become A 'Ungovernable Banana Republic'

Does anyone remember the American Jobs Act? A year ago President Obama proposed boosting the economy with a combination of tax cuts and spending increases, aimed in particular at sustaining state and local government employment. Independent analysts reacted favorably. For example, the consulting firm Macroeconomic Advisers estimated that the act would add 1.3 million jobs by the end of 2012.

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