The reality is that we should do nothing. The reality is that the best thing to do right now is to kick the can down the road. We should not be having any spending cuts right now.The economic acumen of a six-year-old: do nothing and maybe the problem will go away. Brilliant.
The lead-up to that opinion includes a series of strawmen and total fabrications about both the Clinton and Reagan administrations, wherein the two geniuses seemingly agree that there had been real, significant spending cuts throughout both periods. A simple look at Federal Spending across time demonstrates what a colossal lie such a claim really is:
True enough, spending flattened out in the last years of Reagan, but that was after years of big increases (which say more about Congress than Reagan, to be fair). Spending cuts under Clinton? Please. It is true that spending under George W. Bush accelerated far more rapidly, however. And this is because of 9/11 and it's aftermath, a Democratic Congress who--domestically--Bush was more than happy to pacify with new spending, and finally the financial crisis.
The point is, two periods of strong economic growth were not used to make substantial adjustments (real cuts) to spending. The resulting reductions in the debt under Clinton--the surplus years--followed a period of huge deficit increases. And at the end of the day, those reductions were more or less forced on Clinton by a Republican-controlled Congress, because we need to remember that Clinton--prior to then--was more than prepared to go forward with a hug healthcare initiative that would have wiped away all of those reductions and increased the debt significantly. And then some. So this idea that Clinton was some kind of spendthrift is just silly. Again, spending increased under Clinton, but a booming economy drove revenues up and thereby led to budget surpluses, at least until the economy slowed down. Then, we were right back where we started.
And that's the problem with Krugman's silly idea of kicking the can down the road: when times are good again, no one (or almost no one) will be willing to take serious action. Minor decreases in the deficit will be taken as a trend that will--somehow--continue on indefinitely. Thus, merely cutting the rate of growth in this program or that program will be heralded--or criticized--as a "massive cut." Remember those days under Clinton? Every suggestion of not increasing spending on a given program as much as some desired was attacked as a cut in spending when it was no such thing. How quickly these clowns forget.
Yet Krugman actually thinks that--if we kick the can down the road--there will be a serious effort to rein in spending. Eventually. Talk about being detached from reality.
I guess I shouldn't be surprised at hearing such nonsense from these two. After all, it was Krugman who once called for a housing bubble to "stimulate" the economy. O'Donnell, for his part, imagines himself as some sort of Renaissance man and Southie tough, though he's unsurprisingly deferential to Krugman, pathetic fanboy that he really is.