WASHINGTON (CBS DC) – New York Times columnist and Nobel Prize-winning economist Paul Krugman writes that Americans are not facing a fiscal crisis, they are really facing a job crisis.
The Princeton University professor writes in his Dec. 6 column that an entire industry is built around promoting panic around the deficit. “Lavishly funded” groups tied to corporations are purposefully providing mixed signals hyping both the danger of government debt and the danger of too much deficit reduction. “No wonder the public is confused,” writes Krugman.
But instead of the “fiscal cliff” taking up so much focus, Krugman argues that unemployment is the most pressing issue.
“Long-term unemployment remains at levels not seen since the Great Depression: as of October, 4.9 million Americans had been unemployed for more than six months, and 3.6 million had been out of work for more than a year,” writes Krugman.
Krugman continues, writing that the “unmet job crisis” is pushing American workers into a “forced idleness” where society as a whole suffers from a waste of those workers’ talents and effort.
But Krugman concludes that it’s hard not to see the disconnect between Washington politicians and average American workers.
“Influential people in Washington aren’t worried about losing their jobs; by and large they don’t even know anyone who’s unemployed,” writes Krugman. “The plight of the unemployed simply doesn’t loom large in their minds — and, of course, the unemployed don’t hire lobbyists or make big campaign contributions.”
A November Pew Research Center poll found that nearly seven-in-ten (68 percent) of Americans believe there would be a major effect on the U.S. economy from the automatic tax increases and spending cuts that would be triggered if the White House and lawmakers failed to reach a deal to avoid the “fiscal cliff.”
There is also division on party lines regarding the impact of the “fiscal cliff.”
The Pew poll found that 79 percent of Republicans say the effect on the economy would be negative and 74 percent see a negative impact on their own personal finances. However, Democrats express less concern: 50 percent say the economic effect of automatic spending cuts and tax increases would be mostly negative, and 52 percent say the same about the effect on their personal finances.