Barack Obama is making the trop to the G8 summit, where financial cooperation between the world’s largest economies will be discussed. Europe is having financial difficulties, because they are suffering the effects of austerity. Meanwhile, back on the home from, the news could not be more clear that austerity is the wrong was, as this Paul Krugman article explains.
Yesterday the IMF chided the United States for spending too little and cutting its budget deficit too fast — and most people, if they heard about it, just shrugged. To be honest, that was my initial reaction too: we’ve come to accept the sheer stupidity of our current economic policies, and the fact that apparently nothing can be done about it, as part of the “new normal”.
Still, every once in a while we should step back and consider the awesomeness of the situation. Normally, we expect governments to have trouble containing demands that they spend more and/or tax less. Normally, we expect the IMF to be a fiscal scold, telling spendthrift governments to make tough choices; the old joke is that IMF stands for It’s Mostly Fiscal.
But now we’re in a situation — a liquidity trap — in which more government spending is a good thing, because it helps put unemployed resources to work; meanwhile, the cost in terms of future debt service is minimal, because interest rates are so low. Both ends of the intellectual case for austerity — the claim that spending cuts are actually expansionary and the claim that terrible things happen when debt rises even if interest rates are low — have collapsed… [emphasis added]
Inserted from <NY Times>
Photo credit: The Political Carnival
Krugman goes on to say that there is only one reason that we are not pursuing a sane economic policy: The Republican party.
Karen Finney, Jared Bernstein Heather McGee discussed the crumbling case for austerity, as Obama prepares to attend the G8 Summit.
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What better proof could we have than Europe’s record that austerity does not work. Republicans know this and the support austerity for the 99%, but runaway spending for the 1%. I loved Bernstein’s comment that Republicans use facts liker a drunk uses a lamp post. The keys to making Republicans happy are these. Make life more austere for you and I and more excessive for the 1%. Do everything possible to make America fail, as long as we have a Democratic President.
I expect Europe to use the G8 as an opportunity to move away from austerity. Sadly, elements of austerity, that is, for the 99%, will remain in place, as long as Republicans have the power to sabotage Democrats’ attempts to grow the economy.
13 Responses to “Is Austerity Doomed?”
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Sigh…
Amen, Patty!
Republicans want government to fail for the majority of the people. The way to do that is propose and support policies that fail, appoint inept people when in power, and create gridlock when out of power. It is no accident that approval of congress is around 10%.
And they say that rating is because of Senate Democrats.
Must be. Those Dems are blocking the jobs, jobs, jobs policing between women's legs.
The Uber-Rich Predator Elite want to govern us by fear of nonexistent threats, while promising us rewards that will never arrive.
Even Abraham Lincoln understood this back in 1864:
http://www.commondreams.org/view/2010/10/30
I remember reading that a whle back and thinking how prophetic Lincoln was. I'll bet he never thought that the Republicans would be the ones to unleash this crisis!
But Nameless! Dontcha know that Abe is a RINO. 😉
A conservative on Fox News: "We're headed down the road that Europe's already on." Yet the Republican/Teabaggers want to continue down that road which is clearly rife with giant sinkholes. Europe is falling into those sinkholes and having great difficulty, proving that austerity doesn't work.
TC, you said yesterday that perhaps there is a spending problem, but it is who benefits from the spending, in response to my comment that I don't the US has a spending problem, it has a political problem. To clarify, I think that prudent spending that creates employment opportunities and benefits the nation with for example infastructure improvements, is the kind of spending that is needed. Get people working, paying taxes, buying goods etc and thinkgs can and will look better. Create fair taxation where all pay their fair share, including corporations and the 1%, and increase government revenues. Once things are lined up again, then reduce the national debt. But Republican/Teabaggers have done everything imaginable to block a sensible approach. That is the political problem. Republican/Teabaggers don't care a lick for the country or the majority of its people.
I often recall the words of JFK who said "Ask not what your country can do for you, ask what you can do for your country." Of course the Republican/Teabaggers will spin that around and say it is time to cut social programmes, but that is not the intent of JFK's words. The Republican/Teabaggers need to go the way of the dinosaur starting in 2014.
Lynn, we're on the same page, except for semantics. Instead of spending less, we just need to change from meeting 1% greed to meeting 99% need.
One statement is absolutely correct. The Republicans don't care what happens to this country as long as it keeps Obama from receiving any credit. The WPA did wonders after the depression. Schools and roads were built and local citizens were employed to build them, thus improving the infrastructure and the economy. Our construction workers have no jobs, many schools are about to fall down. Our bridges are collapsing. Seems obvious to me, use government support to get the economy growing.
Bingo, Edie!
Hi Edith!
I don't think that they don't care so much as that they are completely incapable of connecting point A to point B. Why else would anyone buy into voodoo economics? LOL!
Only the millions who depend on Faux Noise as their sole source of news.