Krugman: Greece Holds an Important Warning for US

Republicans are pointing to Greece and saying it holds a warning for the US—too much debt and too much borrowing will bring us doom. Paul Krugman agrees that Greece offers a lesson for Americans, but he draws a different one: Don't listen to those Republicans, who have been "wrong about everything" in regard to the economy over the last several years. Yes, Greece's debt was too high, Krugman writes in the New York Times. But "what turned Greek debt troubles into catastrophe was Greece’s inability, thanks to the euro, to do what countries with large debts usually do: impose fiscal austerity, yes, but offset it with easy money."

Republicans such as Paul Ryan want to impose the same "toxic policy mix" on the US, writes Krugman. They demand we cut government spending, especially for the poor, and simultaneously attack the Fed for its efforts to give the economy a boost. So, yes, Greece should be a warning to us: "If the right gets its way on economic policy—slashing spending while blocking any offsetting monetary easing—it will, in effect, bring the policies behind the Greek disaster to America." Click for his full column. (More Greece stories.)