Fiscal cliff villains are just the usual suspects


Paul Krugman, the Nobel Prize-winning economist, writes probably the most influential economics column and blog in America - and therefore the world. His Monday scribble is usually a reliable and thumping diatribe against Republicans such as Grover Norquist who, ahead of negotiations over the fiscal cliff, produce familiar and familiarly wrong arguments about how to take America's economy forward. In today's column, Krugman slaps the "phantom menace" of America's deficit. Here's a flavour:

"So let’s step back for a minute, and consider what’s going on here. For years, deficit scolds have held Washington in thrall with warnings of an imminent debt crisis, even though investors, who continue to buy U.S. bonds, clearly believe that such a crisis won’t happen; economic analysis says that such a crisis can’t happen; and the historical record shows no examples bearing any resemblance to our current situation in which such a crisis actually did happen.

If you ask me, it’s time for Washington to stop worrying about this phantom menace — and to stop listening to the people who have been peddling this scare story in an attempt to get their way."