Do Americans believe in welfare?

A senior citizen holds a sign during a rally to protect federal health programs at the 8th Annual Healthy Living Festival on July 15, 2011 in Oakland, California. (Getty Images)

The Republicans thought the US presidential election would be a referendum on Obama and the economy, writes Paul Krugman in The New York Times, but it's actually a referendum on "the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare".

The "entitlements problem" as welfare spending is often referred to in Washington, is actually not a problem at all, Krugman argues. "Indeed, U.S borrowing costs are at historic lows, with investors actually willing to pay the government for the privilege of owning inflation-protected bonds. So reducing the budget deficit just isn't the top priority for America at the moment; creating jobs is."