Economy

Paul Krugman: How the GOP's Ideology Is Destroying America's Future

What's behind the refusal to spend?

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The GOP is turning its back on history and seriously harming the future,Paul Krugman writes in his column Monday. The Nobel-prizewinning economist is in no mood to mince words.

In their blind zeal to curtail all government spending, the Republican politicians in control of the House of Representatives have missed one of the central lessons of the past—the need to invest in infrastucture that will make the country richer.

"America used to be a country that built for the future," Krugman opens, somewhat mournfully. "Sometimes the government built directly: Public projects, from the Erie Canal to the Interstate Highway System, provided the backbone for economic growth. Sometimes it provided incentives to the private sector, like land grants to spur railroad construction. Either way, there was broad support for spending that would make us richer."

Not any more. These days, our government steadfastly refuses to invest in the country's future.

It isn't as if there's no cash to do so. Seven years after the housing bubble burst, "the country is awash in savings," Krugman writes, "with nowhere to go." Corporations and banks are holding on to trillions in excess reserves that are simply sitting idle. State governments are strapped, yes, but the federal government, with its ability to borrow money cheaply, could easily help them out. The country briefly saw some construction spending after the Obama stimulus bill, but that seems like forever ago, and was before Republicans got control of the House. Krugman is not about to let this all be blamed on generalized Washington dysfunction. 

No, he writes, you can thank Paul Ryan and his party of "no." What started as an attack on social programs for the poor has mushroomed into an all-out assault on even the most necessary of government spending. Corporations are not going to fix roads or sewer lines, but still this rampant refusal to invest, based on a bankrupt ideology.

You can get a sense of this ideology at work in some of the documents produced by House Republicans under the leadership of Paul Ryan, the chairman of the Budget Committee. For example, a 2011 manifesto titled “Spend Less, Owe Less, Grow the Economy” called for sharp spending cuts even in the face of high unemployment, and dismissed as “Keynesian” the notion that “decreasing government outlays for infrastructure lessens government investment.” (I thought that was just arithmetic, but what do I know?) Or take a Wall Street Journal editorial from the same year titled “The Great Misallocators,” asserting that any money the government spends diverts resources away from the private sector, which would always make better use of those resources.

Never mind that this ideology has failed spectacularly and painfully.

Clearly, the prospect of Republican control of the Senate with looming midterm elections has Krugman down in the dumps. It's just so damn depressing that ideologues who ignore all evidence, common sense and history stand to seize more control of the levers of power which they appear intent on using to grind the country to a halt.