The Fog of Fiscal Flimflam

From “After the Flimflam,” Paul Krugman, NYT:

So we could definitely do worse than the Senate Democratic [budget] plan, and we probably will. It is, however, an extremely cautious proposal, one that doesn’t follow through on its own analysis. After all, if sharp spending cuts are a bad thing in a depressed economy — which they are — then the plan really should be calling for substantial though temporary spending increases. It doesn’t.

But there’s a plan that does: the proposal from the Congressional Progressive Caucus titled ‘Back to Work,’ which calls for substantial new spending now, temporarily widening the deficit, offset by major deficit reduction later in the next decade, largely though not entirely through higher taxes on the wealthy, corporations and pollution.

“I’ve seen some people describe the caucus proposal as a ‘Ryan plan of the left,’ but that’s unfair. There are no Ryan-style magic asterisks, trillion-dollar savings that are assumed to come from unspecified sources; this is an honest proposal. And ‘Back to Work’ rests on solid macroeconomic analysis, not the fantasy ‘expansionary austerity’ economics — the claim that slashing spending in a depressed economy somehow promotes job growth rather than deepening the depression — that Mr. Ryan continues to espouse despite the doctrine’s total failure in Europe.

“So where is this all going? Realistically, we aren’t likely to get a Grand Bargain any time soon. Nonetheless, my sense is that there is some real movement here, and it’s in a direction conservatives won’t like.

“Mr. Ryan’s efforts are finally starting to get the derision they deserve, while progressives seem, at long last, to be finding their voice. Little by little, Washington’s fog of fiscal flimflam seems to be lifting.”

I’m not as optimistic as Krugman about the fog lifting — I think we’re going to be socked in for some time to come — but I hope he’s right.  Maybe the Progressive Caucus will steal in on little cat feet.

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