If one listens to the discourse on both sides of the aisle, one would think that there is not ample evidence that austerity is a failure. It is true that austerity is promoted more forcefully by the Republicans. However, the president, the leader of the Democratic Party, has thrown chain CPI on the table to curb social security increases.
What is disconcerting is that all evidence proves that any form of austerity will fail. Moreover the reality of an ever growing transfer of the country’s wealth to the top 2% makes it an immoral and selfish act.
Those supporting austerity have been following the lead of economists Carmen Reinhart and Kenneth Rogoff and their ilk. These hacks were debunked by a 28 year old grad student who found the flaw in their analysis. They did not have their analysis peer reviewed. One can only wonder why. One can only wonder why there was not substantial media coverage which would have stopped austerity talks in its track. Paul Krugman refers to this as the triumph of bad ideas.
Alan Grayson wrote a rather telling Huffington Post blog. He writes,
From a recent 188-page report by the World Health Organization come these ghastly and appalling factoids:
- Suicide rates rose 40 percent in the first six months of 2011 alone.
- Murder has doubled.
- 9,100 doctors in Greece, roughly one out of every seven, have been laid off.
Joining those doctors in joblessness are 27.6 percent of the entire Greek labor force. By comparison, in the depths of the Great Depression, unemployment in the United States peaked at a lower percentage than that.
These are results following implementation of austerity policies in Greece. If one reads the Paul Ryan’s proposed budget, it would be fool hearted not to believe there would be similar outcomes in America. In fact, America has already implemented a backdoor austerity stance with sequester, government layoffs, and lack of policies to create jobs upgrading the country’s dilapidate infrastructure.
Grayson goes further.
A lot of people blame Greek government debt for the current suffering. … Greek government debt stands at 160 percent of GDP, which seems like a lot. But Japanese government debt stands at 215 percent of GDP, and the unemployment rate in Japan is only 4 percent.
Moreover, Spain’s unemployment rate is virtually as high as Greece’s, but Spain’s government debt stands at only 85 percent of GDP. That’s less debt than Singapore’s, and Singapore’s unemployment rate is 1.8 percent.
So we cannot properly attribute the catastrophe in Greece to labor protection, nor can we attribute it to government borrowing. What is the cause, then? The World Health Organization has the answer: austerity. “Austerity” is a bloodless term for gross economic mismanagement, animated by heartlessness. That robotic cut-cut-cut mentality that deprives us of jobs, of public services, of safety, of health, of infrastructure, of help for the needy, and — ultimately — of our economic equilibrium and the ability to survive. The mentality that ushers in, and welcomes, a vicious war of all against all. Austerity is destroying an entire country, right before our eyes.
Or, as the World Health Organization put it: “These adverse trends in Greece pose a warning to other countries undergoing significant fiscal austerity, including Spain, Ireland and Italy. It also suggests that ways need to be found for cash-strapped governments to consolidate finances without undermining much-needed investments in health.”
No to austerity.
It is clear why austerity is being pushed. It has nothing to do with solving a problem. Bringing budgets back into balance require two things. Those who benefitted the most from the economic expansion on the backs of the working middle class must pay into the public coffers in the form of taxes to reduce budget deficits. Governments must start investing again in people and infrastructure.
This will increase economic growth. It will increase employment. It will increase the number of tax paying Americans. It will increase the amount of taxes collected. The only downside is a temporary decrease in the growth rate of wealth for the wealthy.
This is not rocket science. This is Economics 101. Most politicians and titans of finance would prefer that these realities are ignored.
Austerity will destroy the fabric of America. Reducing Social Security, Medicare, or Medicaid is selfish, evil, and immoral. The wealthy is continuously extracting the wealth from the poor and the working middle class. Productivity gains have gone to the few. Stock market gains have gone to the few. It is time for the many, the poor and working middle class to recover what was taking from them through fraudulent and immoral policies. It is time for the working middle class and poor to assert their worth. It is time to engage in the class war. After-all, this class war has been waging against the working middle class and poor for 30+years now.
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I live in Germany, where they keep trying to sell the idea that the Agenda 2010 saved the country’s export economy. 2010 imposed “austerity” on the rank and file while lowering the cost of employees, deregulating job protections and trashing the influence of trade unions.
Now, I don’t know about others, but my impression of the proper result of “rescue” measures would be a moderate reduction in price/piece and a “slowing” of the decline in growth. Now, what does NOT belong in this scenario, is a moderate increase in turnover, coupled with MASSIVE increases in profits in some branches, but not in small and medium domestic manufacturing and retail.
The Germans are very good at shifting the blame for negative effects to middle class workers, from one tax package to the next, so that nobody can really get a handle on cause and effect. The fact is, many employers are making massive profits, while simultaneously denying their employees a living wage. Sound familiar?
The trick however, is that the effects are so attenuated by social programs, that enough of the population never fully feel the effects so that they don’t dare doubt the “we’re doing pretty good” statements. Thereby always pitting groups against one another in shifting patterns.
They call it a successfully executed austerity plan but always neglect to mention that it only worked, to the extent that it did, because they could feed off of those around them. Now that “those around them” aren’t doing so well, they prescribe the same medicine to the populace, while pumping the banks with cheep money.
Guess who comes up with the short stick? And now, on what basis, pray tell, is the U.S. supposed to be comparable to Europe?