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Paul Krugman, July 1, 2010....
"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."
That was two years ago.....and, naturally, Krugman's "amazement and horror" over governments slashing spending in the midst of a historic recession marked by low consumer demand....went unheeded. Why? Well, because it's Krugman saying it....and although he has been uncannily correct in his economic evaluations, Very Serious "leaders" just simply know better.....you know, in their gut. That's why they are "leaders."
Take England for example.....
Cameron’s coalition government is pushing cuts and austerity measures worth 30 billion pounds ($46 billion) a year to shrink the U.K.’s 11 percent deficit to 2.1 percent by 2015. Investors are speculating this will preserve Britain’s AAA credit rating without slowing the economy too much that it curbs the ability of companies to meet their debt payments.
“Investors are happy with the measures taken by Cameron,” said Christian Weber, a senior credit strategist at UniCredit SpA in Munich. “The perception has spread that it’s better to actually tackle budget deficits than just keep spending and spending and spending, because that limits your ability in the future to help your economy stabilize.”
The liberal Krugman couldn't possibly be considered a serious person then, because Cameron and "investors" KNEW that cutting government spending....austerity measures directed primarily at the poor, elderly and disadvantaged.....had become the widespread "perception" of the bonafide Very Serious.
So, who was correct? The Very Serious David Cameron and the Very Serious Investor class.....or the liberal, yet actually serious, Paul Krugman?
April 25, 2012.....
The British economy shrank 0.2 percent in the first quarter after contracting 0.3 percent in the fourth quarter of last year, the Office for National Statistics said Wednesday. The first double-dip recession in the country since the 1970s was mainly the result of a slump in the construction industry at the beginning of this year.
I simply love the reaction by the Very Serious concerning England's recent dismal numbers....
The G.D.P. numbers caused bewilderment among some economists, including Andrew Goodwin of Ernst & Young’s economic forecasting unit, the ITEM Club. “Our reaction to these figures is one of disbelief,” Mr. Goodwin said.
Mr. Cameron agreed that “these are very, very disappointing figures” and that Britain was in a “very tough situation that frankly just got tougher.” But he added that the government would stick to its austerity plan, which is intended to eliminate most of the budget deficit by 2017.
"Disbelief", "disappointing".....even though entirely predicted by the serious Paul Krugman, Dean Baker and others. But, by god, disbelief, disappointment or not.....Cameron is sticking to his Very Serious, yet fully discredited, austerity measures. As the numerous left bloggers have mocked..."the beatings will continue."
As I have said numerous times.....very wealthy and privileged "leaders" worldwide, including those in the U.S., have responded to the Wall Street-created economic collapse by insisting all governments slash spending.....and do so immediately and continually until.......economic expansion happens. This nonsensical point of view from so many Serious people has dominated virtually all discussions of the topic.
In the U.S., all Republicans, too many Democrats and a slinky-spined president have bought into much of this "expansionary austerity" bullsh*t. The Frank Luntz-polled meme of "we don't have a revenue problem, we have a spending problem" has basically won the day .....and this falsehood, especially false during a low-demand recession, if run to ground in the same fashion as the failed Cameron austerity measures have proven out, will lead the U.S. into a double dip recession as well.
Note to voters: Romney-Ryan are all about cutting government spending.
Go look at this chart to see that if public employment in the U.S. since 2007 would have not suffered such a huge hit through conservative-led austerity cuts, our national economy would be chugging along at normal growth rates by now.
What America needs right now is another government stimulus program to create jobs and encourage consumer spending. What we don't need right now, despite every conservative's faith-based rhetoric, is more government cuts in spending.
I'll let this guy explain....
Businesses aren’t investing in the United States because of a lack of consumer demand, International Paper CEO John Faraci said Friday.
“I think this was all about consumer spending and demand. You know, the problem we have is there’s inadequate demand to create jobs. We know how to respond when there is demand,” he said ...
“Productivity has obviously been very good, so we’re creating more capacity with less resources. But at the end of the day, this is really about responding to demand...."
But Faraci can't possibly be correct because the Very Serious have already decided our economic problem is all because government is spending too much.
Business responds to demand, not the other way around. Conservative U.S. austerians want to cut demand through further cuts in federal spending......even though, clearly, that will do more harm to our fragile recovery.