Most Popular Choices
Share on Facebook 5 Printer Friendly Page More Sharing
OpEdNews Op Eds    H2'ed 3/6/12

The return of austerity on the Democratic side of the aisle

By       (Page 1 of 1 pages)   No comments
Paul Krugman reviews the baneful effects of austerity on the current economic recovery. His essential case is that:

Under President Obama, however, the dire fiscal condition of state and local governments -- the result of a sustained slump, which in turn was caused largely by that private debt explosion before 2008 -- has led to forced spending cuts. The fiscal straits of lower-level governments could and should have been alleviated by aid from Washington, which remains able to borrow at incredibly low interest rates. But this aid was never provided on a remotely adequate scale.
This policy malpractice is doing double damage to America. On one side, it's helping lose the future -- because that's what happens when you neglect education and public investment. At the same time, it's hurting us right now, by helping keep growth low and unemployment high.

So, with austerity policies doing a double whammy on America, what is the proposed course of action by House Democratic Whip Steny Hoyer? Why of course , he's pushing for austerity! I mean, naturally, what else should one do under these circumstances? America is suffering, as Krugman points out, because the Federal Government is refusing to take advantage of very low interest rates to borrow money and then give that money to state and local governments.

As any parent knows, you can't re-do years of a child's life. Once their third grade has passed them by because the local government couldn't afford to keep their school in operation, you can't just hit a re-set button and re-do that year once properity returns. That year of the child's life is gone forever and the child will simply have to work harder to simply keep up with his or her peers who weren't deprived of that year of education.

Columbia University put out a study (PDF) on the job losses of the 1982 recession, showing that the long-term effects were quite bad and that they've lasted to this day. Earning losses for people who lost that year of employment were 30% and after 15 to 20 years, were still 20% lower than for their peers in similar economic circumstances.

But, the right wing says, we don't want to be "another Greece," now, do we? Greece is currently sufferings lots of economic troubles, true, but the CEPR pins the blame for those troubles on European Finance Ministers.

"Given the underestimation of Greek losses so far, and the recessionary impact of budget tightening , mass layoffs, a 20 percent reduction of the minimum wage , and other austerity measures -- I think the pessimistic scenario outlined in the leaked document is a very plausible scenario," said Weisbrot.
"The bottom line is that you can't shrink your way out of a recession -- you have to grow your way out. What they are doing to Greece really makes no economic sense. At this point, it looks like the economy would do better if Greece were to exit from the euro, as opposed to enduring indefinite recession and stagnation, extremely high and persistent unemployment, and increasing poverty. The European authorities are certainly pushing Greece toward the exit and default option." [emphasis added]

How's the American economy doing at this point? It's doing relatively okay, but not great and there might be serious trouble on the horizon. This is hardly the time to be engaged in budget-cutting and " other austerity measures, " but that's apparently just what Hoyer is determined to do.

House Minority Whip Steny Hoyer (D-Md.) said Monday that he and other House centrists are working to put together a "concrete" deficit-reduction compromise...

What Hoyer wants is to contract the American economy at a time when we're hardly out of the woods, when we're nowhere near full recovery and when contractionary policies are absolutely the worst possible option on the menu right now. The recent announcement of the centrist Senator Olympia Snowe (R-ME) that she will retire prompted me to review how the centrists generally have done as far as progressives are concerned. Quite frankly, I think they've been pretty gosh-darned worthless and far too concerned with their own short-term political fortunes to give a hang about how America in general is doing.
Must Read 1   Well Said 1   Valuable 1  
Rate It | View Ratings

Richmond Gardner Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

PN3(Ret), USN, 1991-2001. Done a number of clerical-type jobs. Computer "power user," my desktop is a Windows machine, but my laptop is an Ubuntu Linux. Articles usually cross-posted at Personal details at (more...)
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
   (Opens new browser window)

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Pro-life beliefs

Institutional privilege

Jonathan Chait's case for Obama

Protest against wars in Afghanistan, Iraq and Pakistan

The bail-out plan

James Gilligan and the 3rd Presidential Debate

To View Comments or Join the Conversation:

Tell A Friend