If you’ve been reading Paul Krugman’s column, and more especially, his blog, you know that he has been decrying the fact that the G-20 countries have embarked on an austerity drive, just when running up deficits is precisely what the doctor ordered. Here’s his latest.
It does seem counterintuitive to think that you can get yourself out of a depression by spending money like a drunken sailor. In a manner of speaking, we could repair our crumbling infrastructure, rescue our foundering states, get ourselves on the path to a sustainable energy future, and educate our kids, all while achieving the laudable goal of putting our friends and neighbors to work and pulling ourselves out of a depression, while assuring that the eventual deficit will be less than it would be if we practice austerity. It sounds too good to be true, but the strange thing is that it’s not.
And yet, as Krugman keeps reminding us, the so called experts who got us into this mess can’t bring themselves to do what’s required, not because the stimulus spending to date has caused problems, but because it might, at some distant point in the future, do so, despite evidence in the form of the nation of Ireland that austerity just causes more problems. Better to inflict pain (always on other people of course) than to do what economic theory suggests. (I should amend that to say that it is what the only flavor of economic theory that has been consistently right suggests).
One would be tempted to believe that this is solely caused by a puritanical streak in our lords and masters, but on closer reflection, that’s just not so. We’re told that deficits are evil, but it depends on what you do with the borrowed money, apparently. They think nothing of running up huge, and often off-book deficits, in order to flush money down the toilet to fight counter-productive wars. We get a negative return on that investment, and since so much of the money is spent elsewhere, very little in the way of stimulus. And it’s not like they are repelled at the thought of getting something for nothing. In fact, they insist that you can get something for nothing: increased governmental revenues and economic bliss through tax cuts, always disproportionately for the rich, no matter the circumstances, despite the fact that the experiment has been tried and it has failed repeatedly since Saint Ronald got his tax cut in 1981. We are still hearing demands for precisely that kind of tax cut, and if the Republicans take over, no doubt they’ll insist on passing one again, which Obama will sign in a magnanimous show of bi-partisanship.
So, one must ask, why are the folks, who all over the world, but particularly here, are not adverse to deficits, and not morally opposed to something for nothing, draw the line at letting the “small people” get something for nothing too? Maybe that question answers itself.
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