"Austerity Advocates Have Been Wrong About Everything" [View all]

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Austerity Advocates Have Been Wrong About Everything

by Dean Baker at US News

http://www.usnews.com/debate-club/is-europe-right-to-abandon-austerity/austerity-advocates-have-been-wrong-about-everything

"SNIP........................


Rarely have countries suffered from so much self-inflicted damage. The recipe for restoring these economies to full employment has been known for more than 70 years: Governments just need to increase demand.

Ideally this will be done in ways that boost long-term growth through investments in infrastructure, education, and research and development. However, governments can also pursue policies that quickly put people back to work, such as youth job programs.

....

They can also follow the successful path of work sharing that has allowed Germany to lower its unemployment to almost 5 percent even though its growth has been no better than that in the United States. It makes far more sense to subsidize shorter workweeks than to pay unemployment benefits to people who are not working at all.

The data have shown the austerity advocates to be completely wrong. There are no economic obstacles to restarting Europe's economy. The only obstacle is the political one created by powerful interest groups and politicians who do not want to own up to their mistakes. This should not be a basis for making tens of millions of people across Europe continue to suffer unnecessarily.

.........................SNIP"