Is It Time To Listen to Paul Ryan?

Paul Krugman, in a New York Times OP-ED piece (here) goes through the five excuses most commonly given for doing nothing as the US economy continues to perform poorly. And. in another blog post (here), Krugman points out that the academic research on the supposed "expansionary" effects of austerity is based on a "statistical illusion".

Of course, austerity is what Wisconsin's favorite son has been preaching since he assumed leadership of the House Budget Committee. Here is Krugman's smack down of arguably one of the world's all-time great conservative philosophers (Krugman actually implies that conservative philosophy might be delusional):

Excuse No. 2: Fear the bond market.

Two years ago The Wall Street Journal declared that interest rates on United States debt would soon soar unless Washington stopped trying to fight the economic slump. Ever since, warnings about the imminent attack of the “bond vigilantes” have been used to attack any spending on job creation.

But basic economics said that rates would stay low as long as the economy was depressed — and basic economics was right. The interest rate on 10-year bonds was 3.7 percent when The Wall Street Journal issued that warning; at the end of last week it was 3.03 percent.

How have the usual suspects responded? By inventing their own reality. Last week, Representative Paul Ryan, the man behind the G.O.P. plan to dismantle Medicare, declared that we must slash government spending to “take pressure off the interest rates” — the same pressure, I suppose, that has pushed those rates to near-record lows.