Austerity is a Bitch

Filed in International by on July 2, 2010

What president believed in his heart and soul that austerity was the answer to pull America out of its economic mess? Herbert Hoover. Don’t get me wrong, I’m not saying Hoover wasn’t a great man, he was just a shitty president. The work Hoover did in feeding millions of people during the Great War and afterward is a shining example of the good in humanity. Even the work Hoover did as a mining engineer was amazing. However, as a president, Hoover sucked ass.

But now as we are STILL in an economic mess brought on by mismanagement of the economy by Wall Street and the previous Republican administration, there is talk about stopping spending and balancing the budget. Paul Krugman writes:

For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.

Remember this as this debate heats up, Republicans have no — NO — moral or political right to make policy after they so totally fucked up the world during the first decade of this new century.

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A Dad, a husband and a data guru

Comments (21)

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  1. jason330 says:

    it is bad news for the country (and the world for that matter) that so-called Democrats like Tom Carper have bought into the Republican “growth through shrinkage” hogwash.

  2. nemski says:

    Let’s be clear here, RSmitty is more a Democrat than Carper is.

  3. delacrat says:

    We’ve already tried austerity with mass layoffs, furloughs, foreclosures and bankruptcies.

    It’s a shop worn notion that says austerity leads to prosperity.

  4. You know one thing that will help the deficit – growing the economy. Focusing on the spending side is short-sighted and wrong. Getting people to work will have a much bigger effect. I don’t even understand people who say austerity is “common sense.” Someone explain to me how not spending money has ever created a job?

  5. Hey we’re worried about non-existent inflation!

  6. Anvil says:

    Roosevelt’s economic bacon was saved by WWII. Obama’s recession is going strong with two wars running. Should we be pursuing additional wars?

  7. nemski says:

    Anvil, just keep on repeating Republican untruths.

  8. jason330 says:

    Zombie GOP talking points never die.

  9. Geezer says:

    “Roosevelt’s economic bacon was saved by WWII. Obama’s recession is going strong with two wars running. Should we be pursuing additional wars?”

    War production took government spending to 80% of GDP in WWII. That amount of government spending, not what the spending went to, was what saved the country’s — not Roosevelt’s, everybody’s — economic bacon.

  10. nemski says:

    Ah, Republican Zombies.

  11. jason330 says:

    GDP had recovered by 1936 thanks to the New Deal. The recovery faltered for a period when Roosevelt tried to balance the budget, but even that dip in GDP was won back by the New Deal prior to the attack on Pearl Harbor in 1941.

  12. anon says:

    In a proper Keynesian stimulus you do actually have to cut spending at some point. We may not yet be as close to that point as we like, but too bad – Obama should have prepared for the loss of political will. He didn’t fight hard enough for a larger stimulus, and failed to implement an actual large jobs program. Now the fight for continued spending will only drag Democrats down.

  13. Actually I find the Republican talking point that WWII ended the Great Depression hilarious. Government spending on defense is still government spending folks! I guess it doesn’t count if we’re bombing someone.

  14. Hoovers Ghost says:

    Uh, Mr. Data Guru, you might want to actually check the data on Hoover’s record. Hoover increased spending by 50% from 1929 to 1932 and the budget went from a large surplus to a large deficit. That’s a rather odd form of “austerity.”

    Data source–Table 1.1:

    http://www.whitehouse.gov/omb/budget/fy2008/pdf/hist.pdf

  15. When history is inconvenient, just rewrite it.

    Reagan never raised taxes!

  16. nemski says:

    LOL Hoover’s Ghost, there was a freaking depression going on. That would be expected since tax receipts went down dramatically.

  17. Hoovers Ghost says:

    Sure the depression explains a drop in tax revenue but it doesn’t explain the increased spending (which, according to myth, Hoover opposed). And, if you look at the numbers, only a bit more than half of the change from surplus to deficit is the result of a drop in tax revenue. (The change from surplus to deficit is about 3.4 billion and tax revenue fell about 1.9 billion.)

  18. I think it the Depression had more to do with contraction of the money supply by the Fed. It had nothing to do with Hoover’s policies except the fact that he increased taxes to make up for falling revenue, which further deepened the Depression. I will grant that short term deficits do not matter. The problem that I have is the long run. Keynes believed in a a blanced budget based upon economic cycles.

  19. jason330 says:

    You also think that the Earth is 10,000 years old. Just saying.

  20. Phil says:

    The great depression can’t really get compared to this. We had a trade surplus going on at the time, as well as a strong manufacturing base.

    One thing I never read about was if the death of over 400k working age american men have anything to do with the successful job market after the war.

  21. skippertee says:

    That weenie in the White House along with the conservadems have given the shaft to the working families of America once again on so many fronts.
    Screw the Tea Party!
    When Labor and the rest of the under $200,000 a year people finally get fed up with the horseshit shoveled their way,there’s gonna be a revolution in this country that will make the Civil War look like a snowball fight.
    All we need is a spark and a leader.
    We want you BIG BROTHER !!!!!