FROM CNN's Jack Cafferty:
Forget all the talk about an economic recovery - the U.S. just might be headed in the opposite direction.
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Paul Krugman - who has a Nobel Prize in economics - writes in the New York Times that he fears we are in the early stages of a depression.
Krugman says a failure of policy is to blame - that it's a mistake for governments around the world to raise taxes and cut spending at this time. Krugman says nations should be spending more to stimulate the economy.
And, at the end of the day - it is the unemployed and their families who will pay the high cost of this depression. Krugman writes about the "tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again."
Speaking of the unemployed - almost one million Americans are losing their unemployment benefits because the Senate failed to extend the deadline.
The bill didn't get the 60 votes needed to pass because lawmakers are looking for ways to put the brakes on skyrocketing deficits.
The same bill also contained another $24 billion for Medicaid funding for various states. And since they won't be getting that money right now, they will be forced to cut hundreds of millions of dollars, on top of what they've already cut.
It's getting very ugly out there.
Despite the Obama administration crowing about the so-called recovery summer - 78% of Americans say the economy is still in a recession according to a new CNN/Opinion Research Corporation Poll. Some recovery.
Here’s my question to you: Is the U.S. entering a depression?
Interested to know which ones made it on air?
Don in Canada writes:
As difficult as it is to criticize a respected economist like Paul Krugman, my common sense tells me that more government stimulus spending is a crazy notion. American (and Canadian) governments and bureaucracy at all levels have become far too large, costly and inefficient. It is too easy to spend someone else's money. Drastically reducing government spending may hurt the economy in the short term, but will set the stage for a bona fide recovery down the road.
Russell in New Hampshire writes:
It is clear that in order to survive a years-long depression we are going to have to attack the defense budget with a meat cleaver. Many generals at the Pentagon will have to lose their jobs, and the wars in Iraq and Afghanistan will have to be ended or sharply reduced. We must care for our people, many of whom will never work again, and the costs of a few rockets will help pay the unemployment bills. Not to mention state legislatures' debts.
Though more spending is recommended by many leading economists to avoid a depression, I think finally the people and the financial markets may have figured out that this will only postpone the inevitable: you cannot spend yourself out of debts. The baby boomers have lived nicely on borrowed money and while they retire comfortably we can start paying their bills.
It's not fair (nor is it going to solve the problem) to only take food from the mouths of the poor, but until new non-regressive tax revenues are raised, the skies will not clear. Two campaign pledges the president has failed at are: removing us from Iraq and raising taxes on those making more than $250,000. Both would go a long way at perking up the economy!
Bud in Washington writes:
I'll bet that a lot of working folks think we're already there, Jack. I've got friends that have been out of work for two years... I'm fortunate. I work for an IT federal contractor and the company is doing well. But the Washington Metro area is not the real world. People don't call it Disneyland East for nothing.