Austerity When Stimulus Is Needed
Spending, not cutting, is needed.
by Stephen Lendman
On December 31, 1933, The New York Times published John Maynard Keynes "Open Letter" to Franklin Roosevelt.
On November 25, 2008, the London Guardian republished an abridged text. It urged:
- "spend, spend, spend;"
- supply "cheap and abundant credit;"
- stress "speed and quick" recovery; reform can come later;
- focus on "increas(ing) the national output," boosting purchasing power, and "put(ting) more (people) to work;"
- "increasing aggregate purchasing power is the right way to get prices up and not the other way around;"
- undertake "a large volume of loan expenditures under government auspices;" at the same time, work cooperatively with business; and
- choose projects that "can be made to mature quickly on a large scale, as for example the rehabilitation of the physical condition of the railroads."
Roosevelt, in part, followed Keynes' advice. More was needed. Depression continued. End of decade war spending ended it.
Obamanomics is polar opposite FDR's. Cut, cut, cut, replaced spend, spend, spend. People needs get short shrift. Imperial priorities matter more. Do do corporate ones and benefits afforded America's rich.
Conventional wisdom is wrong. Economic policy is wrongheaded. Conditions are dire. Main Street's in protracted Depression. Austerity deepens hard times. Sequester piles on more.