In today’s column, Paul Krugman asks:
So here’s the question I find myself asking: What will it take to break the hold of this cruel cult on the minds of the policy elite? When, if ever, will we get back to the job of rebuilding the economy?
I wish it was likely that sanity came with the flick of a switch and the government fully dedicated itself to stimulating the economy by funding projects for Main Street America and creating jobs for working class Americans. But I don’t think we’ll be able to magically turn off the determinative fear of the Invisible Bond Gods.
Instead, as I tweeted last night to Krugman, I think a more likely scenario for breaking the hold is this: The economy doesn’t get any better by November 2012 and a Republican candidate defeats President Obama. With control of the White House, the GOP pushes for more austerity measures, provides no stimulus, and the American economy is pushed into a deeper recession. Democrats then win back the White House in 2016 by openly campaigning on creating jobs through large federal government stimulus spending. At that point, political and economic necessities would make it impossible for the Invisible Bond Gods to maintain a stranglehold on economic policy makers.
I really hope this isn’t the course we go on, as it promises at minimum six years of unthinkable economic pain inflicted on 90% of America. But given the complacency in DC about 9.5+% unemployment, I find it hard to believe sudden change is likely. We could be in for a long haul here, people, and the only potential upside is that the longer we all suffer, the more likely it is that someone with power will actually wake up to the need to take bold action and help working Americans.