Paul Krugman, The Mutilated Economy
Krugman cites new research from the Federal Reserve Board’s lead economists that pegs the actual cost of the austerity measures that are US policy these days at a reduction of 7% of US economic potential, which equates to $1T per year for years to come.
Yes, a trillion dollars per year for the next decade.
As Krugman puts it,
the evidence is overwhelming that by failing to respond effectively to mass unemployment — by not even making unemployment a major policy priority — we’ve done ourselves immense long-term damage.
Are our so-called leaders listening to this? Not a chance. And the reports authors are pessimistic about turning this around even with aggressive policies at this point: the damage is too deep.