The socialist answer to the problems caused by too much borrowing & spending...

[Libertarian Lilly]

The socialist answer to the problems caused by too much borrowing &
spending...

...borrow and spend even more!

Hey, can I borrow and spend my way to prosperity too?

http://tribune-democrat.com/editorials/x234169852/Jim-Scofield-Has-
austerity-really-worked

May 29, 2012
Jim Scofield | Has austerity really worked?

Jim Scofield

— We should have learned from our experience recovering from the Great
Depression of the 1930s that government austerity programs only make the
economy worse in the face of an economic collapse. The Hoover and Roosevelt
administrations tried government cutbacks without success.

Now, Britain, Ireland and many other European countries that have been
drastically cutting spending to balance budgets are demonstrating this
again.

Sadly, so are we.

The United States pulled out of the 1930s crash with New Deal government
initiatives, and finally with World War II spending, and the postwar
programs, such as the GI Educational Bill, subsidization of housing and
more.

The huge debts amassed by these expenditures were paid off by a revived
economy.

Slashing federal spending and cutting 600,000 state and local jobs is
counterproductive. This is a government-induced fiscal contraction on top
of the private economy’s.

The idea that “Americans are used to living on a budget,” as Republican
House Speaker John Boehner phrased it, is a misleading old saw. We have the
highest home ownership because most families borrow in order to buy a
house. Most of us don’t plunk down $25,000 or so to buy a car – we go into
debt.

The same for education spending and credit card debts. Indeed, without such
indebtedness, our economy would never expand properly.

Corporations borrow, too.

Banks speculate wildly – witness Bank of America recently – and with
depositors’ government guaranteed funds.

Let’s not forget that what most conservative austerity advocates want is
not really less government spending, but lower taxes on the rich and lower
social spending.

Republican administrations, from Reagan through George W. Bush, while
preaching balanced budgets, increased the debt much faster than Democrats
(Clinton and Carter). And Bush’s tax cuts, wars and drug-company friendly
Medicare bill account for large parts of the past three years’ debt.

The Paul Ryan budget proposal, dutifully passed on a Republican party line
and endorsed by Mitt Romney, claims it will reduce the debt, but only by
using unspecified revenues.

Cutting public budgets and employment when there is already high
unemployment just sinks us deeper into the hole, with fewer consumers able
to buy as much. We have 13 million officially unemployed, not counting
part-time and discouraged workers.

Our private sector has been laying off by the hundreds of thousands. Yet
corporate profits are up, along with ex-ecutive pay. The top 50 Pittsburgh
area CEOs’ pay was up 12 percent last year, averaging $7.3 million. And
that’s just Pittsburgh – CEOs nationally average $11 million.

In contrast, unemployment benefits have been cut back.

Eleven million homeowners owe more on their houses than they’re worth.

Even many recent college graduates are unemployed or employed in low-pay,
non-graduate-type jobs, or even unpaid internships – the latter their
gamble that these might lead to real jobs.

And those from poorer- or medium-income families often face tens of
thousands of dollars in debts. These slow career starts, or no starts, will
redound unfavorably throughout their working lives. Economist Paul Krugman
suggests that the real burden on future generations isn’t big government
debt but delayed career starts and lower paying jobs for today’s youth, the
latter leading to lower tax support of government.

Businesses and conservative politicians see this crisis as a good
opportunity to cut wages and benefits of both public and private workers,
to cut social support programs and get rid of unions. Republican
politicians have never favored Social Security and Medicare, except
grudgingly. The Paul Ryan Republican plan will jeopardize Medicare by
making it into a voucher plan dependent on private insurance. It proposes
large cuts to income tax and corporate tax rates, further benefiting the
wealthy.

These proposed tax cuts are not liable to get the economy moving.
Corporations – such as Hewlett-Packard, about to lay off 30,000 workers –
are downsizing their labor forces.

State and local governments, which are savaging school budgets and cutting
support programs, need federal help. The Obama stimulus probably kept us
from a full-fledged depression, but was not enough to prevent a long-term
decline. As we should have learned from the 1930s and the damage austerity
has done to Europe since the economic crash, we need a more active federal
effort. Too many Americans are suffering.

Jim Scofield of Richland Township is an associate professor emeritus of
English at Pitt-Johnstown.
___________________________


"We are spending more money than we have ever spent before and it does not
work.... We have never made good on our promises.... I say after eight
years of this administration we have just as much unemployment as when we
started... and an enormous debt to boot." - Henry Morgenthau, who served as
Roosevelt's treasury secretary during FDR's administration. He was the one
who originally worked with FDR to formulate those spending policies, the
New Deal.

Yes, Obama is emulating FDR.

http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321

[Kangaroo Court Australia]

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