This cartoon is more than a little self-ironic since, per Krugman, the debt ceiling thing itself distracts from understanding the nature of the problem. Actually individuals have little problem relating to the debt ceiling as the main problem since the implied need for governmental belt-tightening is what makes sense for individuals faced with too much debt. As a consequence, the idea that governmental contraction is the path to salvation for the economy, even in the midst of an historic downturn, easily gets traction, not just with individuals but with policymakers. As Krugman says, this conception of reality is so appealing and pervasive that economic decision-makers in the U.S. and the E.U. refuse to abandon it even as all of the evidence points the other way.
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This cartoon is more than a little self-ironic since, per Krugman, the debt ceiling thing itself distracts from understanding the nature of the problem. Actually individuals have little problem relating to the debt ceiling as the main problem since the implied need for governmental belt-tightening is what makes sense for individuals faced with too much debt. As a consequence, the idea that governmental contraction is the path to salvation for the economy, even in the midst of an historic downturn, easily gets traction, not just with individuals but with policymakers. As Krugman says, this conception of reality is so appealing and pervasive that economic decision-makers in the U.S. and the E.U. refuse to abandon it even as all of the evidence points the other way.
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