It’s got to be frustrating to be a Paul Krugman or a Joe Stiglitz. “Told you so” is only so much fun when the price for being right is the demise of the world economy. In his latest NYT column, Krugman explains how it was the European Central Bank, and governments’ misplaced notion that during a recession you cut back spending, that put Europe in the mess it’s in – and we’re following on their heels, fast.

I hope, for our sake as well as theirs, that the Europeans will change course before it’s too late. But, to be honest, I don’t believe they will. In fact, what’s much more likely is that we will follow them down the path to ruin. For in America, as in Europe, the economy is being dragged down by troubled debtors — in our case, mainly homeowners. And here, too, we desperately need expansionary fiscal and monetary policies to support the economy as these debtors struggle back to financial health. Yet, as in Europe, public discourse is dominated by deficit scolds and inflation obsessives. So the next time you hear someone claiming that if we don’t slash spending we’ll turn into Greece, your answer should be that if we do slash spending while the economy is still in a depression, we’ll turn into Europe. In fact, we’re well on our way.

We’re in a bit of a bind, folks. The Republicans have convinced the country that we simply must cut spending or else (and they don’t quite enunciate what the “or else” is), while the President and Democrats in Congress gleefully jumped on the GOP budget-cutting bandwagon a good two years ago. And now we’re all heading towards a worldwide economic disaster, and few government leaders, in any country, are acknowledging the cause.

Even if the Republicans were right, and they’re not, cutting government regulations isn’t going to get the economy back on its feet. A recent analysis by the Associated Press showed that government regulations caused a whopping 0.2% of all layoffs in the past three years. So the Republicans are pushing spending cuts, which will depress the economy further, and the repeal of regulations, that will do next to nothing to help the economy, but will probably hurt workers, food safety and the environment. And all the while, Democrats will be too afraid to tell voters the truth – that we need to create demand, fast.