December 2, 2011

Austerity to address depression economics?

I know I am no economist, but I am really wondering how Greek and English austerity is really going to help them recover? How does laying off government workers help an economy that is already shrinking? How does reducing the spending money of the people at the bottom help with that either? I ask, partially because I am watching the European crisis and wondering what will happen next, but also because austerity seems to be the GOP's model for recovery.


Bob said...

The Republican and now conservative Europian economic theory goes like this:

Less Economic Activity = More Economic Activity.

Of course in many conservative minds, government sopending isn't actually economic activity. Its as if the government just takes dollars or euros into a back room and burns them.

Its almost criminal that these fools want to slow the only sector of the economy that is actually spending.

Streak said...

I think that idea that government spending is illegitimate is absolutely right. I mean, that is what they think. I remember the outrage over the idea that stimulus money might go to artists, as if artists don't eat, or pay rent, or buy clothes or supplies.

I think about this every time we go to our favorite Mexican restaurant. If we don't have jobs, we don't go out to eat. If enough of us don't do that, that place closes, and so on and so on. No tax cut will help that.

And back to the government worker idea, the brilliance of the New Deal--to me--was the idea that we create a stable safety net of regulations and welfare--and then we let the market go nuts within that parameter. If people can make billions, so be it, because we tax them and we take care of the people who can't make enough to eat.

In addition, big government has been so under fire for so long, but I wonder why people don't value the basic stability of government jobs in an economy. None of them (or very few) are terribly lucrative, but they are less (historically) vulnerable to ups and downs in the market. Communities understood that, because that is why they all vied to be the county seat, or to have the state university or state hospital, or state prison. Those jobs were stable, which would allow the local area to weather changes in the economy better.

Why isn't that good?

steves said...

I am no economist, either, but if past economic policies contributed to their current condition, wouldn't it be a bad idea to do more of the same?

From listening to the analysts on the BBC (hardly a mouthpiece for conservatives), I get the impression that some kind of austerity measures are necessary to preserve what is left of their economies.

Some spending does improve the economy, but it depends on what you are spending the money on. In our country, giving money to bail out banks and them not using that money to help out struggling homeowners was not really a help. On the other hand, bailing out GM was a help because they kept people working and paid back the money. S

Anonymous said...

You did a piece on religion, and got comments on AL Simpson. You started out with LORD Knows, as to your comments, then threw out the stinger that others were not using English that tracked with you, or your religious beat.(in effect your wave lengths) Since you profess to be savvy in economics, and government, can you tell us the following:
What % of the Federal annual budget outlays of now around $ 3.6 trillion( with a T) are for federal civilian employees, in both % terms, and the dollar amounts >>?
Of course, some speak about entitlements,, which Al Simpson branded as the 300 million tit suckers, as the Chairman of some Obama Commission on Debt.
This clown act was really over the top.
Especially, for a guy who is listed as a Sr Advisor to BP(British Petroleum), but does not even claim he is a historian like NEWT, to dodge(obscure) the reality, INFLUENCE peddler lobbyist.
Anyway, I will look forward to your answer if you have any to offer up, Thanks... Most money is funneled through FEDERAL Agencies like big DOD contracts for Boeing, LOCKHEED, Halliburton, and then some big electronic wire transfers for MEDICAID, Social Security etc.
But, the growth in the number of civilian employees is not that great is it.
Yet, the same old knee jerk reaction, get a Government employee off the back of Halliburton.
Did you ever hear your political heros say: GET Halliburton off the back of the federal taxpayers ?
Anyway we all know that the U S treasury was rigged to send billions to Foreign German banks who were gambling in exotic derivatives, or credit swap defaults, if was not a free market when massive billions was used to cover their gambling debts.
And, teachers, firemen, even ministers were devalued in AMERICA.
The problems are at the top of the political fixer class.
Hope you can find out an answer to my question, thanks if you can, I have not found any who know-- EXACTLY..

Anonymous said...

By the work I agree with what you stated on the GOP rants against Government workers(PRIOR PIECE), that is, why I asked the question below.
Also, I am not giving any a lecture on "GOING TO HELL", in the context of any religion.
However, John McCain just noted the warm part of hell part to the passed away DICTATOR of North Korea.
(who was reputed to abuse North Korea's people, just awfully).
However, are people like McCain blind to what is going on in America..?
So, some DIVERSION, point far away..
This crony OLIGOP phony capitalism is not real free markets,(or real capitalism); it is rigged markets, to misallocate NATIONAL RESOURCES, to hurt AMERICA, and its citizens.
Odd, from a bunch of neocons, who serve only
their own greedy agenda, and could care less about the NATiON, and the well being of the very core fabric of this Country