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View Diary: Krugman: Dwindling Deficit Disorder (135 comments)

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  •  Oh, come now. (9+ / 0-)

    The US isn't the only victim of IMF's draconian 'austerity' game, now being imposed on the 'first world' as it has been imposed repeatedly on 'second' and 'third' world nations for so long. It's not like we're on this sinking ship all by ourselves. It isn't difficult to see that the economic reality of any targeted nation is simply not a consideration for the money-moguls running the show.

    Quelle Surprise! IMF Always Prescribes the Same Austerity Hair Shirt. Specifically, under Article IV 'consultations' the prescription is thus:

    There is repeated emphasis on cutting public pensions and “increasing the efficiency” of health care expenditures. Raising the retirement age is a standard recommendation, without any correlation to a country’s life expectancy. Although slowing population growth can have important benefits (not the least of which is reduced pressure on the world’s resources and climate change), an aging population is seen throughout these agreements as a threat to the fiscal sustainability of government expenditures. This is not demonstrated through empirical evidence, for example, which might take into account productivity growth that would support a rise in the ratio of retirees to workers, while allowing for rising living standards for both, as has been the case in prior decades. There also appears to be a predilection for increasing labor supply, irrespective of unemployment or labor force participation rates. This includes such measures as reducing eligibility for disability payments or cutting unemployment compensation, as well as raising the retirement age.

    So. Krugman notices that the conditions used to justify the harsh austerity medicine no longer exist (if they ever really did), and would disappear entirely with proper management. He writes about it, wondering aloud why in the world the Masters of the Universe aren't acting to save their supposedly precious capitalistic world order. Meh. You'd think at some point Cassandra would realize that something quite else is going on, it's not just stubbornly self-imposed blindness to reality that's steering the ship... it is deliberate remodeling of reality.

    •  What is interesting though is that the IMF itself, (7+ / 0-)

      granted in a bit of doublespeak, more or less acknowledges that austerity in Europe has been a total disaster.  

      •  That was extremely interesting, (6+ / 0-)

        since draconian austerity has been their policy prescription for ailing economies for decades.

        The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

        by psnyder on Mon Mar 11, 2013 at 08:25:40 AM PDT

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        •  I suspect one of the important caveats about (2+ / 0-)
          Recommended by:
          Joieau, elwior

          the austerity measures has much to do with inflation.  In many of the "developing" areas where the medicine is recommended, the runaway inflation causes squeamishness with regards to the stimulus firehose.  

          In Europe and the US, it's a different matter entirely ... inflation if anything needs to go up.  At least the US has the Fed trying to throw money at the problem (commendably despite the flack they get).  The Eurozone periphery is basically at the mercy of waiting for Germany and Brussels to get is head out of its collective you know where.

      •  But now that the IMF realizes this, (3+ / 0-)
        Recommended by:
        Joieau, elwior, psnyder

        have they started recommending against austerity?  I haven't seen anything indicating that it has.  

        Renewable energy brings national global security.     

        by Calamity Jean on Mon Mar 11, 2013 at 09:23:01 AM PDT

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      •  If their mission was to improve economies (4+ / 0-)
        Recommended by:
        happymisanthropy, Joieau, elwior, psnyder

        they would be failing miserably, but since their mission is to drive wealth upward, they're doing remarkably well.

        See, in their world view, an elite strata of very smart people only should control the world's wealth doling it out accordingly. They are working very steadily towards that end knowing all the while there will be growing, or in reality, shrinking pains for societies the world over.

        All we have to do is be patient until our betters and benefactors control enough wealth, then merely work to death hoping they trickle some our way (that's if they even allow us to work). It's the 'trust fund' mentality they are born into. As they see it, we irresponsible proles should be content knowing very smart people are in control of our money and accept from them what they see fit. (appropriate transaction fees [subject to change without notice] applied).

        After all, most of us are just the stupid little people that clog the streets and sidewalks best avoided via chauffeur-driven limousine and door to door doorman service.

        The IMF: The ultimate class-driven international trust fund arbiters for the little people.

        Did you ever think someday you too might be a trust fund baby?

        Physics is bulls**t. Don't let them fool you. Fire IS magic.
        (Facts brought to you by the Party of the Future - the GOP)

        by Pescadero Bill on Mon Mar 11, 2013 at 09:38:47 AM PDT

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    •  IMF reversed course, so... (4+ / 0-)
      Recommended by:
      Joieau, elwior, Just Bob, psnyder

      There's that.

      WaPo last October

      IMF: Austerity is much worse for the economy than we thought

      So who, besides Pete Peterson and the Koch Brothers, do our leaders in DC have to buttress their failed economic policy?

      It is an old strategy of tyrants to delude their victims into fighting their battles for them. FDR

      by Betty Pinson on Mon Mar 11, 2013 at 11:15:32 AM PDT

      [ Parent ]

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