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View Diary: Austerity isn't dead... but it should be (132 comments)

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  •  "The Austerity Delusion".... (10+ / 0-)

    Mark Blythe explains in this article at Foreign Affairs.com why austerity is a delusion, and why it is dangerous:  

    ...Unable to take constructive action toward any common end, the U.S. Congress has recently been reduced to playing an ongoing game of chicken with the American economy...

    ...much of Europe has been pursuing austerity consistently for the past four years. The results of the experiment are now in, and they are equally consistent: austerity doesn’t work....and in the fourth quarter of 2012, the eurozone as a whole contracted for the first time ever...

    The first factor is distributional, since the effects of austerity are felt differently across different levels of society. Those at the bottom of the income distribution lose proportionately more than those at the top...

    ...Trying to get the lower end of the income distribution to pay the price of austerity through cuts in public spending is both cruel and mathematically difficult. Those who can pay won’t, while those who can’t pay are being asked to do so...

    ...The second factor is compositional; everybody cannot cut their way to growth at the same time...

    ...The third factor is logical; the notion that slashing government spending boosts investor confidence does not stand up to scrutiny...

    ...Austerity, then, is a dangerous idea, because it ignores the externalities it generates, the impact of one person’s choices on another’s, and the low probability that people will actually behave in the way that the theory requires...

    ...During the 1920s and 1930s, austerity didn’t just fail; it also helped cause World War II...

    Yet, rich, selfish, and ignorant and/or arrogant "leaders" continue to foist the policy of demanding that "those who can't pay be required to do so", so that "those who can pay" won't have to.  Not only is this an unnecessary cruelty, this austerity delusion is a dangerous game, where the outcome could be far different, and far more negative than its proponents understand.  

    •  blood from turnips etc. (5+ / 0-)

      The delusion is that somehow the people in the bottom 20% really CAN pay the price -- that if only the government stops "oppressing" them by providing, for example, heating assistance and Section 8 housing subsidies and food stamps and Medicaid, those people will pick themselves up and go out and get a $45,000 job and pay taxes and rent and a new car.

      My sense is that there are some people in the bottom 20% for whom that may be true -- the culture of getting support without even trying. There are others who are collecting all the benefits while working under the table, either cash jobs or drug deals or whatever. It does exist, I see it daily, and we don't help our cause by arguing that it's a total myth.

      But the problem is that unless you are extremely good at screening, it's hard to find those people -- so instead, "austerity" just eliminates all the social programs. It's like knowing you have ants in your kitchen, but you can't find them, so you burn the house down.

      And the other problem is that there is just as much taxpayer money going to the "idle rich" -- the oil companies, agribusinesses, and defense contractors who also get paid NOT to produce, or get paid for existing, or whatever else they have managed to write into the tax code and subsidy laws. The human desire to get something without working for it seems to me evenly distributed regardless of social class; it's just poor people don't have the power to cut off rich people's ways of doing it.

      •  "The 400 richest Americans own more assets... (6+ / 0-)
        "...than the poorest 150 million; the bottom 15 percent, some 46 million people, live in households earning less than $22,050 per year..."  
        There just isn't enough blood in those turnips to wash away the debts that the 400 and their cronies ran up by starting two decade+ long wars and simultaneously cutting taxes.  
      •  There is far more taxpayer money going (3+ / 0-)

        to support the grifters at the top than the few at the bottom. The rich know this,that's why we have lobbyists.

        "George RR Martin is not your bitch" ~~ Neil Gaiman

        by tardis10 on Sun Apr 28, 2013 at 11:02:50 AM PDT

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      •  "A rising tide lifts all boats..." (0+ / 0-)

        except, of course, for those whose hulls are shot full of holes and already sinking - which is austerity in action. Your analogy of ants in the kitchen is nothing short of poetic.

        Your black cards can make you money, so you hide them when you're able; in the land of milk and honey, you must put them on the table - Steely Dan

        by OrdinaryIowan on Sun Apr 28, 2013 at 02:39:42 PM PDT

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