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In the Austerity/Deficit debates I fall firmly on the Krugman side and think it is insanity to cut spending in a recession. Reducing deficits may be an admirable goal and a major part of a long term game plan, but I believe Krugman's major point is that yes, deficits probably should be reduced at some point, but THIS IS NOT THE TIME TO DO IT.

There seem to be a number of others who share this viewpoint: Spend into a recession. Once the economy is working again, then deficit reduce. We are simply not at the crisis point that all the austerity mongers would have the American public believe.

Let's assume the AMs (Austerity Mongers) get their way. Everyone seems to be on their side - the entire Republican Party, The President, most Dems, the media mouthpieces, all the corporate monied powers, etc. The ADs (Austerity Deniers) seem to be a few lonely voices in the wilderness - Krugman, Reich, Yves Smith, Dean Baker, Richard Eskow, and a few others. (A hat tip to Mika Brzezinski for comparing people who do not rush to embrace austerity to climate deniers).

On with Austerity! Safety nets are cut, "tough choices" are made.  Government spending is reduced, causing more unemployment in both the public and the private sector. As a result, there are even LESS disposable dollars in an already moribund economy. Foreclosures increase. All government revenue streams decrease as taxes decrease - federal, state  local taxes, income taxes, sales taxes, etc. So,  even more government services get cut, causing even more unemployment, causing even less money, etc. etc. etc.

And then. . . . what? What is the big payoff for the AMs? Are they standing by waiting to buy off public assets? Do they want to own all the housing? Is the goal to actually destroy the concept of government period? Do we enter a new age where the Ayn Randian Supermen do whatever they want, own everything, employ everyone?  

I am seriously asking this question. If those in power consciously choose to make a weak economy worse, and the futures of the lower, middle and working classes bleaker, what is the payoff that they envision? Has anyone ever asked them?

All the Very Serious People ever talk about is that if we we don't reduce the deficit right NOW at the expense of the economy in general and the immediate lives of the 99%, then our (sob!) grandchildren will suffer the crushing debt we have left them.

Do you know what my response is to that - So, what? Let the grandkids figure it out. Let them issue the platinum coin if we won't. Let them enact the Single Payer we won't. Let them overcome Citizens United since we won't. Let them clean up a corrupt financial and political and economic system that finally topples over in their lifetime since we won't.

Originally posted to Phoebe Loosinhouse on Sun Feb 03, 2013 at 11:01 AM PST.

Also republished by Money and Public Purpose.

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Comment Preferences

  •  Tip Jar (8+ / 0-)

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Sun Feb 03, 2013 at 11:01:05 AM PST

  •  It is amazing to me, that no matter how often (1+ / 0-)
    Recommended by:
    Phoebe Loosinhouse

    I read articles about the American economy since 2008 and the pressures of Austerity Mongers, how few people recognize and/or reference "The Shock Doctrine: The Rise of Disaster Capitalism" by Naomi Klein.  She really nailed it.

    Greece is where it is because of the AM and the rich are buying it up.

    Great Article.

    "Get your facts first, then you can distort them as you please" Mark Twain

    by andersr on Mon Feb 04, 2013 at 04:55:10 AM PST

    •  I am now living in Spain, where (1+ / 0-)
      Recommended by:
      Phoebe Loosinhouse

      austerity is killing the country.  Today's news is that the unemployment rate here is up again, and it was already at astronomic levels.  Believe me, the U.S. doesn't want to follow Spain's lead on this.

    •  Great point. (1+ / 0-)
      Recommended by:
      Calgacus

      It's like the title of the Sinclair Lewis novel where Fascism comes to America - "It Can't Happen Here."

      Do Americans think they are immune from being Shock Doctrined?

      The American middle class is simply disappearing, being sucked like quicksand and absorbed into a poorer working class. The median American salary barely pays for shelter, food, car, insurance, utilities, and cell phone. The wage stagnation of 40 years is the culprit while costs for everything rise out of sight. When will Americans notice? When the quicksand is up to their nostrils?

      In the meantime our betters (the 1%) are transferring ALL the money to themselves with the assistance of the media and both political parties. No one speaks for the 99% and that is the truth.

      “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

      by Phoebe Loosinhouse on Mon Feb 04, 2013 at 06:22:03 AM PST

      [ Parent ]

  •  A great article by Michael Hoexter (1+ / 0-)
    Recommended by:
    Phoebe Loosinhouse

    Austerity: the Political Struggle over Who Controls the Economy’s Liquidity

    The austerity campaign, a favorite for the last four years of politicians and financial tycoons, remains a seemingly self-contradictory and baffling phenomenon for those who know that it goes against at least 80 years of economic wisdom regarding management of the economy.  The campaign draws on irrational strains and inconsistencies in our economic self-understanding to turn politicians against the welfare of society and the economy as a whole as well as against their own interests as political leaders.  Austerity appears to serve the perceived short-term interests of some sectors of the wealthy and the financial industry but the long-term interests of no one.

    The question remains, if no one’s longer term interests are served by austerity, why is austerity being pursued, other than to satisfy the short-term greed of the few?

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