"Austerity Advocates Have Been Wrong About Everything"

[applegrove]

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"

[rucky]

1. This is all by design

to create a cheap labor market.

[applegrove]

2. To kill inflation making the rich richer.

[Warpy]

3. They've been right about who butters their bread

because austerity is what the wealthy force onto governments in order that they can keep all their ill gotten money.

It doesn't work, nobody really believes it does, ever, the dismal track record over millennia is all too clear. What does work is near confiscatory taxes at the very top recirculated at the bottom to create public works jobs. That gets the money pump working again and rich guys who pay even minimal attention instead of spending it like it's limitless do manage to get richer, although too slowly to suit them.

If we're lucky, we'll do this again over their shrieks of protest and threats to cash out and run away. If we're not lucky, it will go the way it has in the past and we'll end up with violent revolution.

[msongs]

4. a bunch of them got re-elected last fall, they must do something right :-) nt

[pipoman]

5. That is the wal-mart and French model..

neither are effective in increasing disposable income which is what is needed to improve the economy. France has not improved with these measures..in fact they have declined economically since these measures.

It makes far more sense to subsidize shorter workweeks than to pay unemployment benefits to people who are not working at all.

Austerity doesn't...can't breed prosperity. Neither can propping up governments with trade deals, who are never going to allow for worker prosperity and are making no advances toward parity of standard of living with "first world nations"..

[Fumesucker]

6. People who are right are so shrill, it's much easier to forgive being wrong than forgive being right