Austerity Is Dead: Can Someone Please Tell Paul Ryan and His Deluded GOP Cohorts?
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The International Labor Organization agreed, writing in a recent report that “by implementing such austerity measures without regard to the broader global economic outlook, the strategy proved self-defeating as several major economies embarked on similar deflationary policies at the same time, thereby reducing aggregate demand both at home and abroad.” In layman’s terms: austerity isn’t working, especially when all of Europe does it at once.
As Rep. Jerrold Nadler (D-NY) explained, the U.S. and Europe are engaged in a real-time experiment regarding economic policy and the outcome at this point leads to just one conclusion. “ If you grasp the economics of the economic recoveries from 2007 in Europe and the United States, they matched until 2010, when [Europe] start[s] to collapse,” he said.
There’s a good case to be made that the U.S. deficit is already coming down too fast, closing at its quickest pace since World War II. Three hundred and fifty progressive economists signed a letter warning that jobs, not austerity, is the most pressing U.S. economic need, and that quick deficit reduction will likely be counterproductive. A conservative scholar at the American Enterprise Institute also warned that “If fiscal austerity is applied too rapidly, US growth will drop and the debt-to-GDP ratio will rise, boosting the nation’s debt burden. The lessons from Europe and Japan are that austerity, per se, is not the way to move to a sustainable fiscal stance,” he wrote.
In the academic world, at least, the debate over austerity seems to be at an end. But if the GOP has its way, austerity will come to America in a big way in 2013. Hopefully, we don’t all need to start stocking up on syringes and firewood.