Austerity Economics Is Walking US Prosperity Off a Cliff

[xchrom]

https://www.commondreams.org/headline/2014/07/17-0



***SNIP


What's most troubling, argue Stein and Hersh, is that the impacts of the "deficits are bad" and "spending is bad" mantra will have long-lasting impacts on the economy as the lack of investment strangles the future potential of the economy.

They write:

To understand the impact of spending cuts on the overall economy, we can look at CBO’s changing estimates of potential GDP in the first quarter of 2014 and its estimate for potential GDP at the end of 2020. Relative to CBO’s estimates made in 2010 about the state of the economy, its most recent estimate shows growth of the U.S. economy’s supply-side potential is $351 billion smaller now after three years of spending cuts. CBO estimates also indicate the potential future growth path for the U.S. economy decreased by $633 billion through the end of 2020, following the austerity-burdened recovery.



Austerity is moving this key metric in the wrong direction, and CBO’s report shows this policy choice is costing the U.S. economy dearly. CBO forecasts for potential GDP fell as austerity took hold, illustrating the painful and unnecessary costs of cutting spending on public investments, education, nutritional assistance, emergency unemployment insurance benefits, and more. These humane economic policies would be a textbook response that provides targeted fiscal stimulus in a downturn to deliver a strong, stable recovery.

[liberal N proud]

1. I think that is their plan

[xchrom]

2. indeed. policy drives an awful lot of our reality. nt

[deutsey]

3. Yes, I think austerity was always the end-game of the "Reagan Revolution"

The social progress made last century has been unraveled and the old order is being restored.

[ReRe]

7. I can't remember...

... maybe 20 years ago (?), but I started saying to my hubby "Those damn 'conservatives' will not be happy until we're ALL pinching pennies." And here we are. Austerityville. Did anyone else feel the squeeze as time progressed since Reagan?

[ChisolmTrailDem]

14. Who are they and, please, ...

...flesh out the plan.

This isn't about doubting your suspicions, it's about validating mine.

[liberal N proud]

16. The Neocons, 1% and the GOP they employ

The end game is to break the middle class and return the United States to sweatshop economy.

It is a stupid plan as American middle class is the largest block of consumers in the world but the rich think that if they break the middle class, they will have it all. All the money that is and that is what they want.

They want it all and they want it now.


Anyway, that is my observation of what is happening today.

[butterfly77]

4. Kick&Recommended...

[woo me with science]

5. K&R

[bullwinkle428]

6. K&R for an important topic getting lost in the mix of all

of the other huge things going on right now.

[WillyT]

8. K & R !!!

[MannyGoldstein]

9. Barack Hoover Obama

Kevin Baker/Harpers: Barack Hoover Obama
Paul Krugman: Barack Herbert Hoover Obama

The Republicans, of course, are even worse on this issue than the Democrats. But for the leader of the Democratic Party to champion a lighter version of Republican garbage isn't compromise: it's collaboration. And it's been an utter catastrophe (for the 99%).

[xchrom]

11. +1

[jwirr]

10. One of the big problems I see is that even Democratic voters do not understand the deficit. First of

all they often think it is the debt. They do not even know there is a trade deficit. Secondly many have fallen for the rethug propaganda and think that the deficit (debt) is the real problem. Until we can get this out there with a clear explanation too many will be voting for cutting the deficit without understanding what it means.

[Octafish]

12. It's the new Trickle Down.

Like Washington, it works for Goldman Sachs.

[ChisolmTrailDem]

13. What is the endgame here? nt

[xchrom]

15. driving money upwards ..rather than in a horizontal direction.

if money bulges in the middle -- far more people prosper and participate.

[Populist_Prole]

17. "Austerity" is just a clinical sounding euphemism they use

The real definition is: Whipsawing their political opponents, while extracting rents. That's it.

If there were truly a movement to for austerity accross the board, the pentagon wouldn't be but 50 yards point to point.

[MisterP]

18. NEVER supposed to, as the Reagan WH itself admitted a year after the election--but once they're

in the electioneering can go by the roadside, now can it
http://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/