Austerity Myths - to listen to M$M you'd never know there is an approach other than "austerity now!"

[Bill USA]

... here Paul Krugman dissects the myth that austerity is the only approach to be taken immediately. Thanks to M$M pretty much entirely ignoring those who have been saying that economic STIMULUS is what is needed now, while dealing with the Bush Deficit can be dealt with after stimulus is used to get the economy restarted.

Emphases are my own.....

http://www.nytimes.com/2010/07/02/opinion/02krugman.html?ref=paulkrugman

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.

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.

Bond vigilantes are investors who pull the plug on governments they perceive as unable or unwilling to pay their debts. Now there’s no question that countries can suffer crises of confidence (see Greece, debt of). But what the advocates of austerity claim is that (a) the bond vigilantes are about to attack America, and (b) spending anything more on stimulus will set them off.

What reason do we have to believe that any of this is true? Yes, America has long-run budget problems, but what we do on stimulus over the next couple of years has almost no bearing on our ability to deal with these long-run problems. As Douglas Elmendorf, the director of the Congressional Budget Office, recently put it, “There is no intrinsic contradiction between providing additional fiscal stimulus today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential.”
(more)

Prof. Krugman did leave out another cause for the "austerity now" fervor. The cause he left out is the political calculation by the Red State Brigade which are doing everything they can to kill off any possible recovery the Dems can fashion to the GOP's Trickle Down - Deregulation Disaster - to enable them to chant: "Obama is killing the economy". This is the actual basis of the "austerity now" crusade by the GOPers who a few years ago passed tax cuts (50% of which went to the top few percent in terms of income in the country) which helped create the Trickle Down Disaster (by increasing concentration of wealth) - while asserting that "Deficits don't matter".

The hypocrisy of the GOPer insistence on "austerity now" is further revealed by their refusal to allow an end to the temporary tax cuts - for the wealthiest (whose incomes went up rapidly since the Shrub was selected by the Supremes, while the median real income for all citizens went down) while tax levels in the U.S. are at a 50 year low. The wealthiest are not job creators, adequate aggregate demand is what leads to increased sales and profits for businesses and greater job creation - to take advantage of the increased demand for goods and services. Increased aggregate demand is fostered by reducing the tax burden on the middle class which during the Bush regime was increased by the Bush tax cuts which went mostly to the most wealthy.

[saras]

1. Myth 1 - austerity has ever worked anywhere for any country.

[Newest Reality]

2. Austerity seems to be a

neo-liberal codeword. We need to translate it read between the lines. I don't think that anybody who understands how this is shaking would think that we are going to be told openly, and in plain terms, what is going on and what to really expect.

Austerity means that we losers get dumped as human resources if we are not privileged enough to deserve a future in the technocracy being forged within the now victorious MIC. There is no fix for this and no political help is on the way. It is pretty much set in stone and now, we are managed in the best ways available. Believe what and as you will, the reality is more concrete and can and will be felt.

Austerity means we payed for and, (if we are still able to survive) and will continue to pay for results and actions that have very little to do with our welfare, (GOP bad word). The rest will be about how "on your own you are" or what kinds of resources and community you can muster-up to continue with a semblance of comfort. Again, that is if you are not firmly embedded in the winning class(es).

This Winter looks to be a lot colder.

[meow2u3]

3. Working definition of austerity

A neo-liberal code word: force crime victims to pay for the actions of the criminals that robbed them.

[izquierdista]

4. I have my own definition of austerity

1) No more mega-mansions; they will all be used to house the homeless.
2) No more oil will be imported; gasoline will be rationed (i.e., like in WWII)
3) No more imported clothes; if it's not made in the USA, you don't need it.
4) No more imported beer or wine; if it's not made here, you don't need it.
5) For those adversely affected by #3, laws against public nudity will be repealed.
6) No more country clubs or golf courses; the will be planted with vegetables.
7) No more reality shows; however, libraries will be open late.

[TheWraith]

5. So in other words, fascism is okay when you agree with it?

If you think there's another word for it, what do you think you'd be calling it if the government decided to ban, say, Current TV?

[TalkingDog]

7. THANK YOU! I've been thinking this for weeks. Austerity = Propaganda

So what does it mean? Well, you've touched on some of it.

They are manipulating the ingrained ideas of thriftiness and budgetary consciousness. Which American's see as good and necessary for their own financial security and well being.

In reality, the cuts are neither thrifty nor do the always help the budget's bottom line. They are often vindictive, political and harm the "household"

It would be like deciding to stop paying for grandma's medicine while still buying a new car for yourself and calling that "Austerity" Yes, the budget may "work", but at whose expense?

[Newest Reality]

8. Thanks for understanding!

Yeah, that realization jumped out at me after spending way too much time paying attention to what's going on and viewing various sources and articles.

Good for you! I would wish more people would not only see the industry of manipulation and social engineering, but remain very skeptical of the terminology and reasons for our condition.

It is not a necessarily comfortable perspective, but I assure you, events that ensue will seem far less shocking or surprising and knowing is about courage.

[ljm2002]

6. It's the result of having a captured media...

...who simply will not dig down to find out the facts, nor will they subject their Republican guests to any hard questioning. Rather, they parrot whatever they are told by their bosses, whose only interest is in serving themselves and the rest of the wealthy elites.

If we had a real media, they would be pointing out the things you note, as well as other examples, e.g.:

- Who was it who coined the term "ownership society" to encourage more people to buy houses? (Hint: it wasn't Barney Frank.)
- Who was it, after 9/11, who when asked what citizens could do, responded that they should "go shopping"?
- Who was it who said "deficits don't matter"?

So we had our President telling us we should buy homes and go shopping more, and our Vice President claiming that deficits don't matter. Now it appears those statements are "inoperative"... and our so-called media just sits there with their thumb up their collective ass, not saying a word about it when their Republican guests show up and start bloviating about how GASP there's a DEFICIT and it's the biggest, most humongous problem facing the country and we need austerity (but only for the proles) RIGHT F***ING NOW!!

It is downright infuriating.