Monday June 17, 2013, 2:10 am
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.
I think it's a false argument to compare the US to Europe. Each country within Europe has come up with different ideas of how to deal with the financial recession. Those who fell back on the old ideas of austere budgets have struggled much worse than those who took a more modern or progressive approach. When a government makes severe cuts for an immediate budget improvement they find the long range goals have lost the staying power to over the cuts. Superficially, it sounds logical to cut the budget when times are rough, economically it erodes the most important reasons for having an organized central government.
An analysis by the Federal Reserve (San Francisco) makes a clear case:
" Federal fiscal policy during the recession was abnormally expansionary by historical standards. However, over the past 2½ years it has become unusually contractionary as a result of several deficit reduction measures passed by Congress. During the next three years, we estimate that federal budgetary policy could restrain economic growth by as much as 1 percentage point annually beyond the normal fiscal drag that occurs during recoveries.
The current recovery has been disappointingly weak compared with past U.S. economic recoveries. Researchers and policymakers have pointed to a number of potential causes for this unusual weakness, including contractionary fiscal policy. For example, Federal Reserve Vice Chair Janet Yellen (2013) argues that three tailwinds that typically help drive strong recoveries—investment in housing, consumer confidence, and discretionary fiscal policy—have been absent or turned into headwinds this time."
Monday June 17, 2013, 6:12 am
I'm not so thrilled with her words bouncing back, I'd say we are crawling back. But we may not even crawl if they keep cutting our social services in the CPI, Food Stamps, and a host of other programs that help our children, Veterans, and Elders. While we protect those in the upper levels of finance.
Monday June 17, 2013, 8:10 am
It's a shame that the people we choose to lead us, are intelligent, but have no street smarts, which ultimately will be a very depressing scenario for our crazy country.
And I agree with Dandelion, European union strategy is flawed as well, certainly not an inspiration!
Monday June 17, 2013, 9:48 am
Paul Krugman has been right about this all along. And he's been writing and saying so for a very long time. I watched him on Rachel Maddow last year as he, and she, pointed out first that austerity is exactly the wrong thing to do in a recession or depression, it always makes it worse, then that FDR used Keynesian economic theory to bring the US out of the Great Depression, then that Richard Nixon did too and said that "we are all Keynesians now". Then, President Reagan and both Presidents Bush did as well. And it worked. Those principles aren't difficult, they say simply that during a depression or recession you increase government spending and hiring, teachers, construction workers, etc., and you invest that spending into infrastructure (and ours is in DIRE need of it, much of it nearly a century old and held together with twine) and worry about the deficit when you have the economic engine roaring again. This has been Republican policy until Barack Obama. That party would rather see our economy fail, along with Europe's, than allow Obama an iota of credit for improving ours. They are so blinded by ideology that they would rather see homelessness, joblessness and hunger attack our nation than do anything that they think might help democrats, even though many of THEIR constituents are harmed horribly by economic issues as well. They are disgusting excuses for human beings. They have the answer, they KNOW it, and they refuse to act on it for political purposes. They are not fit to hold public office, they who would harm the body politic for ideological reasons. I hope the body politic holds them fully accountable in 2014 and 2016. I intend to.
Monday June 17, 2013, 1:06 pm
In a word, yes, it's doomed. Will our sadistic so-called leaders heed the likes of Mr. Krugman......no. They enjoy hurting the people. They enjoy our suffering. They do not care if elders starve, children go hungry and cannot think in school.....IF they still have a school to go to. They do not care if our roads and bridges cruble into the dirt/rivers. THEY DO NOT CARE. But hey, their 'austerity' sure is great for their Corporate Masters' (and theirs) bottom lines. They're doing just fine.....how you doin'? Hint: they don't care.
Monday June 17, 2013, 5:05 pm
ALL WE CAN DO IS VOTE OUT REPUBLICIANS...THIS HAS TO BE STOPPED!!!!!!!!!!, DO NOT STATES KNOW THEY DO NOT HAVE TO WAIT FOR A ELECTION??????????, STATES WITH THESE SO CALLED GOP.....NON- REPRESENTIVES CAN RECALL/IMPEACH THESE IDIOTS....JUST WHEN THE TIME COMES GET OUT AND....VOTE!!!!!!!!!!, DO NOT BELIEVE REPUBLICIAN...LIES!!!!!!!!!!!, VOTE....EVEN IF YOU GET A PHONE CALL SAYING YOU DO NOT HAVE TO OR SOMETHING YOU DID IS YOUR VOTE!!!!!!!!!!, YOUR VOTE IS GETTING TO THE POLLS AND.......VOTING!!!!!!!!!!!!!!!!.........VOTE VOTE VOTE........YOUR CIRCUMSTANCES...NOT...CONTROL!!!!!!!!!!!!!!!!!!!. DIANA.
Monday June 17, 2013, 9:44 pm
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.
Monday June 17, 2013, 10:02 pm
Government intervention saved this country after the depression. The WPA built schools, roads, bridges and boosted the economy. Our infrastructures are all in bad shape, schools falling down and bridges collapsing. It seems obvious to me that more should be spent on boosting the economy and making jobs than the ever lasting war on women.
Monday June 17, 2013, 11:41 pm
TC - am having computer problems - in the middle of my writing something on PP yesterday my computer went 'plink' and turned itself off. It had only been on for 45 mins - in our cold weather how could it have been overheated? Anyway - if I go missing for a bit you will all know it is the computer playing up(!).
Darn it - I have just given Edie a star for something else - I do so agree - FDR saved the US by sensible investment in government projects to benefit the populace after the Great Depression - and it is about time someone looked at what he did and learned from it to do it again - all over the world!
Tuesday June 18, 2013, 5:50 am
Debts have to be honoured / paid, but it is the poorest and most vulnerable members of society who are having to bear the greatest burden. The ones that caused the problem, should be the ones that put it right...
Tuesday June 18, 2013, 3:40 pm
It's People that Austerity Dooms! Soylent Austerity is People! And only the GreedyOnePercenters eat people for snacks..:(
Create safe, clean, well-paid JOBs & help America and the World!