Austerity Is 'Complete Horsesh*t': Ivy League Prof Dismantles the Conservative Lie

[CousinIT]

As devoted readers of Paul Krugman know well, there’s plenty of evidence from the last six years indicating that austerity, the idea that the government can best boost the economy by engaging in significant tax cuts as well as spending cuts, simply doesn’t work — at least not in today’s economic conditions. With the U.S. going through a period of significant GDP growth, a decrease in the unemployment rate and a falling deficit, it’s a lesson that holds less salience today than it did in years past. But in the eurozone economy, the application of “expansionary austerity” has been vigorous — and rather unsuccessful.

. . .

And this is why Brown University professor Mark Blyth’s book “Austerity: The History of a Dangerous Idea,” released in paperback last month, remains such necessary reading. Simultaneously functioning as an economics explainer, a merciless polemic, and a penetrating history, Blyth’s book offers a clear insight into austerity’s lineage, its theories, its champions and its failures. Recently, Salon spoke over the phone with Blyth about the book as well as the U.S. economy and the future of Europe. Our conversation is below and has been edited for clarity and length.

http://www.alternet.org/economy/austerity-complete-horsesht-ivy-league-prof-dismantles-conservative-lie#.WGBxxSTYdfl.twitter

[underpants]

1. Brown University professor Mark Blyths book

Marking so I can buy it

[eniwetok]

2. and yet...

Since 1981 We The People have pissed away some 19 trillion on ourselves that we refuse to pay for. We've gotten use to, maybe addicted to, stealing this money from future taxpayers. OK, sure... some of this money was spent saving the economy from neo-lib deregulation madness... but the money was spent. What happened to the idea that debt should be paid down by those who created it? It was a mistake for Obama to make permanent all of the irresponsible Bush2 tax cuts except for the top earners.

But there's a deeper problem here that many don't want to deal with. The CBO projects interest paid on the debt will skyrocket once rates creep up... to the point that interest may be in the 700 billion a year range in the next decade.

Yikes! We only spend about 25 billion on NASA.

Interest on the debt... minus what's spent on the trust funds, is the biggest waste of money in the budget. Paying down the national debt to strengthen Social Security was a big issue in the 2000 election... yet even as that debt grew, was it even mentioned in the 2016 election?

If our two parties refuse to deal with important issues like this... then has our system become functionally braindead?

[Nevernose]

4. All of that can be summed up fairly easily:

America spends far too much money on the military specifically and war mongering in general, and because politicians have spent so long pandering to the citizenry about the military & spreading around the military spending, those same politicians now don't have the guts to cut that spending.

[Freddie]

5. Plus the military is a great Jobs Program for the South

Ensuring that politicians who support the military will be re-elected in perpetuity. "He fought to keep our Navy base here" and all the jobs that go with it.

[tenorly]

3. All the more so because it's always 'austerity for thee - but not for me'.

Governments that enact hard austerity measures are almost always the same ones who give the wealthy and corporations (particularly those who bankrolled their campaigns) large tax cuts that typically equal or exceed the fiscal savings of the austerity itself.

That, plus the slower tax revenue stream that results from the resulting recession, almost always creates even larger deficits as well.

Besides those listed by the author, Argentina under the year-old Macri administration is a good example of that vicious cycle in action (Macri, to his credit, essentially abandoned austerity a few days ago by announcing he'll sign a stimulus package passed by the center-left opposition in Congress).