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Paul Krugman discussed his recent article in the New York Times with GPS's Fareed Zakaria about why the deficit hawks are dead wrong on the path our country needs to take to get the economy back on track. It's too bad Krugman isn't a member of that deficit commission instead of wingnuts like Alan Simpson. I'd feel like they were sincere in trying to get our economy out of the ditch instead of using the problems we're having as an excuse to destroy Social Security and Medicaid and what's left of our middle class.

For "balance" Zakaria followed this interview with deficit hawk Niall Ferguson. In the end even Zakaria admitted that there is a strong case for short term government spending, not that the Republicans and the Ben Nelsons of the world are going to allow it.

Myths of Austerity:

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

Which brings me to the subject of today’s column. For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy. Read on...

Transcript via CNN below the fold.

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From Democracy Now Naomi Klein talks to Amy Goodman about the deficit hawks at the G20's plans to destroy what's left of the social safety nets for our society.

Naomi Klein: The Real Crime Scene Was Inside the G20 Summit:

AMY GOODMAN: As thousands protested in the streets of Toronto, inside the G20 summit world leaders agreed to a controversial goal of cutting government deficits in half by 2013. Economists say such a move could usher in sizable tax increases and massive cuts in government programs, including benefit programs such as Social Security and Medicare. Meanwhile, world leaders at the G8/G20 failed to come to an agreement on setting new global rules for big banks or imposing a new across-the-board global bank tax.

Journalist Naomi Klein joins us now from her home in Toronto. Her most recent book, The Shock Doctrine: The Rise of Disaster Capitalism. She has an op-ed in the Toronto Globe and Mail today called "Sticking the Public with the Bill for the Bankers’ Crisis."

Naomi, welcome to Democracy Now! You were out on the streets throughout the weekend. Describe what Toronto looks like and what the G20 decisions—their significance are.

NAOMI KLEIN: Well, Toronto has pretty much returned to normal. They cleaned up the broken glass, and the leaders have gone home. And I was near the Convention Center last night and saw some sweeping up. And, you know, all weekend the media here has been in hysterics over the broken glass and the burning police cars and saying, you know, nothing like this has ever happened before in Canada, which, first of all, is just not true. We have some pretty intense hockey riots, where in one case sixteen police cars were burned. So it isn’t true that we’ve never seen property destruction like this.

But my feeling, when I went by the Convention Center after all the leaders had gone home, was that this was the real crime scene, not those shattered storefronts, but what actually happened at the summit on Sunday night, when the world leaders issued their final communiqué. And what that communiqué said was that there wouldn’t even be a measly tax on banks to help pay for the global crisis that they created and also prevent future crises. There wouldn’t be a financial transaction tax, which could create a fund for social programs and for action on climate change. There wouldn’t be a real action to eliminate subsidies for fossil fuel companies that have also created so many social and environmental costs around the world, as we see with the BP disaster.

But what there would be was very decisive action on deficit reductions. These leaders announced that they would halve their deficits by 2013, which is shocking and brutal cut. You know, I don’t believe—maybe some of the leaders intend on keeping—making good on this promise, but, on the other hand, they can hide behind this promise as the excuse to do what a lot of them want to do anyway, and say, you know, "We have no choice; we made this commitment." But so, just to put this in perspective, if the US were to cut its deficit, its projected 2010 deficit, in half by 2013, that would be a cut of $780 billion, you know, if there were no tax increases in that period.

So, you know, that’s why I wrote the piece that came out this morning in Canada’s national newspaper The Globe and Mail, that what actually happened at the summit is that the global elites just stuck the bill for their drunken binge with the world’s poor, with the people who are most vulnerable, because that is really who’s going to pay, when they balance their budgets on the backs of healthcare programs, pension programs, unemployment programs. And also, the other thing that they did at this G8 summit, that preceded the G20 summit, is admit that they were not meeting their commitments to doubling aid to Africa, once again, because of the debt that was created by saving the banks. Read on...

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Here's one of the leading contenders for the Presidential nominiation in 2012, and his solution to fixing our economy... keep those Bush tax cuts in place for the rich and pass a Constitutional amendment that forces the Federal government to balance the budget. You've just got to love these born again deficit hawks that don't think the rich should ever have their taxes raised and think we can control the deficit without it. Pawlenty does say there should be exceptions to those budget cuts but did not elaborate at any time during the interview as to what those should be. If I had to guess dropping bombs on poor people's heads and paying for more wars would be one of them.

Pawlenty elaborated on his views here in an op-ed he wrote -- Balanced budget amendment will do just that:

As we begin a new year and Congress reconvenes, an unpleasant reality is increasingly hitting home with ordinary Americans: Leaders in both parties have irresponsibly run up debt. And, since President Obama took office, the debt crisis has grown exponentially worse. The only way to solve the problem in the long run is with a Constitutional amendment. Read on...

Of course Pawlenty thinks that the stimulus plan has failed as well and we need to put a stop to that. More tax cuts!! Yeah, that's the ticket. We all know how well those that worked with stimulus 1 that Bush put through with tax cuts that didn't do an ounce of good. Of course that's not going to get in the way of Pawlenty and his talking points.