Mass Hysteria

Paul Krugman points out that the current media hype about "deficits" is not based on facts. Here's the key bit from his NY Times op-ed:

To me — and I’m not alone in this — the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. Now, as then, dubious allegations, not backed by hard evidence, are being reported as if they have been established beyond a shadow of a doubt. Now, as then, much of the political and media establishments have bought into the notion that we must take drastic action quickly, even though there hasn’t been any new information to justify this sudden urgency. Now, as then, those who challenge the prevailing narrative, no matter how strong their case and no matter how solid their background, are being marginalized.

And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.

Krugman is a smart cookie. If he says there is hype, then there is hype.

Who benefits from the hype? I don't know, but the famous phrase from the Watergate investigation was "follow the money". Somebody is making money by pushing a lie. My prejudice says it is the rich & powerful behind the Republican party. I don't know how they will make money, but it is clear that they smell blood in the water and expect to make big political gain in November. Maybe they are expecting to get the votes to re-instate the Bush tax cuts. That's worth a trillion dollars to the top 0.1% of the population. That's plenty of motivation to push a lie.

Here's Krugman's analysis:

Why, then, all the hysteria? The answer is politics.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

The trouble, however, is that it’s apparently hard for many people to tell the difference between cynical posturing and serious economic argument. And that is having tragic consequences.

Go read the whole article. It is well worth your time.