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Friday, June 1, 2012

Economy Austerity is not the answer

Posted by Max Brantley on Fri, Jun 1, 2012 at 6:40 AM

Read Paul Krugman. Governments don't rev up the economy by spending less. The family analogy doesn't apply.

The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.

So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.

Tags: U.S. economy, debt

        
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Arkansas Blog

Friday, June 1, 2012

Economy Austerity is not the answer

Posted by Max Brantley on Fri, Jun 1, 2012 at 6:40 AM

Comments (30)

More by Max Brantley

Dr. G. Richard Smith, chair of the department of psychiatry at UAMS, will be the new dean of the College of Medicine, succeeding Dr. Debra Fiser.

Rooting around on the school district website this morning, I noted a link with contact information for the school district, should you like to write the school district or Superintendent Mitch Walton, who reportedly forced the issue.

Event Calendar

Re: Details emerge on Arkansas "private option" for Medicaid expansion

Re: Democrats go after Cotton for trying to criminalize family relationship

Re: Morning report: ExxonMobil caught; city directors get big pay raise; the return of Ken Starr

Several people sent links this morning to yet another odd performance by U.S. Rep. Tom Cotton, already distinguished by his opposition to replenishing to country's disaster aid money unless it can be taken out of some other recipient's hide.

Circuit Judge Wendell Griffen, injured in a bicycle accident last week near his home, sent me an update this morning from his iPad.

The Little Rock metropolitan area (which includes Conway, Sen. Rapert) is a place with a rich and deep religious tradition.

The line is open. Final words: * TIM 'TAR SANDS PIPELINE' GRIFFIN: It's no surprise that Republican Rep. Tiny Tim Griffin of Alberta, Canada, voted again last night to hurry up the Keystone XL pipeline.

So you want to be in pictures? Here's an opportunity.

Public for the first time, the woman who married Damien Echols discusses their relationship

For the vegetarian banh mi sandwich.

Our news partner Channel 4 has a news story that deserves repetition in full. More national headlines for the small people of Arkansas should follow directly.

Perhaps U.S. Rep. Tim Griffin might want to reconsider his earlier decision not to include Republican Rep. Loy Mauch on the list of Republican candidates he'd asked not to use his campaign contributions, having read some of what they'd written.