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Tuesday, September 27, 2016

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Austerity has one purpose: lowering debt.

But as this chart from The Huffington Post (inspired by Quartz‘s Matt Phillips) shows, every country that has been forced into austerity has ended up increasing its debt.

Meanwhile, this Reuters chart from last year compares the U.S. recovery with that of Europe.

chart-of-the-day-real-gdp-rebased-to-100-in-2003-april-2012

In the U.S., we’ve only delved into federal austerity this year with the sequestration. And while our debt is rising, the deficit is falling faster than it has in 60 years. Meanwhile, job creation, the housing market and the stock market are all at multi-year highs.

A new report says that the government could add a million jobs by just canceling the sequestration.

But for House Republicans, that’s not even a possibility. Instead they’re cutting food stamps and environmental programs while debating whether they should threaten to shut down the government if the president won’t defund Obamacare. Some Republicans have actually thought this out and recognized this tactic would only result in the GOP having to cave at some point but Senator Marco Rubio (R-FL), desperate to win back some conservative credibility, is telling Republicans to think of it as President Obama threatening to shut down the government unless they fund Obamacare.

Meanwhile, Obamacare actually reduces the long-term deficit, which is the actual goal of smart debt reduction. Short-term cuts, as Europe has learned, give all the pain with none of the rewards — unless your goal the whole time has actually been to slow the recovery.

Other points:

The Great Tactical Error of the Obama Presidency?
Not matching Republican resources in the 2010 election, which will have consequences until 2022, reports Politico‘s Glenn Thrush.

Republicans Keep Bashing Steve King
But their policies still are closer to his than they’d like to admit.

FISA Court, FISA Court, FISA Court
We should be talking about the FISA Court and Chief Justice John Roberts’ incredible sway over it as the one man who picks all the judges.

Obamacare Depends On Young People Enrolling
And the goals seem reachable, says Adrianna McIntyre, a graduate student studying health policy at the University of Michigan.

Clarence Thomas’ Wife v. Karl Rove
This is what it looks like under the conservative rock. Don’t miss Mother Jones‘ David Corn on #Groundswell.

  • Oarboar

    As a strategy, unemployment isn’t working.

    • Allan Richardson

      This is the first time anyone has been honest enough to call unemployment a “strategy.” And it works about as well as bleeding did for illness. Doctors don’t do that anymore (except for some rare conditions in which the body cannot stop making too many blood cells), but economics is not yet scientifically rigorous enough to PROVE whether putting people out of work on purpose helps or hurts the economy. Not that any RWNJ types would LISTEN to facts, no matter HOW scientific they are; they refuse to believe in climate science as well.

    • dtgraham

      Good observation.

  • charleo1

    The basis for the GOP premise that austerity is the answer. is not economic,
    but political. The debt is a fairly well understood reality, by economists. The
    general public not so much. So it’s like health insurance. Easily lied about.
    As a Country, we do know what causes public debt, and how to fix much of it.
    So, the insistence that the public debt will be solved by any measures proposed
    by the GOP, post Obama, are political. They said look. We have this huge recession, and this new President. He’s going to need to do what all Presidents since FDR
    have done in response to an economic contraction. Namely pump money into the economy. The reason government does that is, it works. Democrat, Republican, doesn’t matter. Reagan increased the Federal payroll by 265,000 workers. But,
    guess what? We’re going to prevent Obama from doing that. You don’t solve this
    thing without a lot of that kind of stuff. And he’ll look weak, and incompetent, and between us, and the God awful economy, he’ll be on the ropes day one! They’ll be begging us to retake the White House, and Congress after 4 years of unemployment
    in the 30’s, and every time the economy sinks lower, up goes the debt! We’ll hammer the Democrats with it, and this economy will be the best thing to ever happen to the GOP! I repeat, they are gearing up to try to derail the economy over
    a debt ceiling/budget fight, that will make summer 2011 look like a lover’s spat.
    Right at the holiday shopping season. If they are successful, the debt that had
    been slowing, will rocket North again.

    • enkelin

      You are 100% correct.

    • ChuckNoland

      Right, 17 trillion in debt is cool. In fact we need 30 trillion.

  • idamag

    It failed miserably in Greece. Why can’t we learn?

    • Allan Richardson

      We HAVE learned, but the Republicans WANT America to fail, so they can blame it on Obama.

      • charleo1

        I think that’s an undeniably true statement. I think we now have a
        political entity in our Country working to cause the Country’s failure.
        Or, the impression of it. It is almost beyond comprehension, the,
        breathtakingly risky, irresponsibility involved. I also think it’s hard
        to imagine for most of us, how far a Party needs to fall to get to that
        point, they would not only consider such a strategy, but go about
        attempting to carry it out as aggressively as they have. In a recent
        poll, young people were asked to describe their impression of the
        Republican Party. The number one responses were, extreme and
        radical. Other impressions were not any better. Authoritarian,
        mean spirited, and racist, also made the top 10. I would add,
        dysfunctional, and dangerous. To appreciate how dangerous,
        one need look no further than the condition of the broader world economy.
        In a word, it’s unstable. Civll strife in the oil producing Mid-East.
        The European Union, one botched finance deal away from insolvency. China, the world’s second largest economy, is expected to see a 5% drop in growth, down from 12.5% t 7.5. Does it matter,
        to us, the, “price of eggs,” in China, today? in a global economy,
        where all is interconnected? We had better believe it does! So much
        so, we have been pumping 85 billion dollars a month into the world economy ourselves. Still trying to keep the patient that is our trading
        partners, and strategic military allies around the world, from dying on the operating table. While we here, in our Island Nation mentality. With our endless deadlocked debates over healthcare, and a
        Government, wholly incapable of consensus, heads into a budget debate that has the potential of wide, catastrophic economic consequences. So, the world sits at the edge of the abyss, and
        watches. And tries to imagine the what a world without America in it’s lead, would mean for them. It is my opinion we may need to do the same. You get it, Allen. I read your comments. So, as Rachel Maddow used to say, ” Please, Talk me down.” Tell me I’m just all full of it.

        • BDC_57

          It is a true statment they are still pissed that Obama won.

  • Mark Forsyth

    GOP plan: Cut,slash,defund and repeal all programs that function well and work for the country and the people.Then impose programs that are as useful as tits on a bull.I guess there must not be any poor,disabled,hungry,unemployed,and elderly republicans in the land,because if there are,the gop doesn’t give a damn about them. Of course some of us have known for a while now that one must have an annual minimal income of $500K to deserve any care from that crew.

  • JDavidS

    You don’t have to be crazy to be a RepubliCON/Tea Clown… but it does help.

    • charleo1

      Exactly! You don’t have to put Party before Country to be a RepubliCon/
      Tea Clown… But….Well, Okay. But, you don’t have to be mean spirited, self
      centered @-hole, to a RepubliCON/Tea Clown, But….

  • Mojeaux

    lol
    UK? Italy? Greece?
    Austerity?

    What the Euro-zone implemented was not Austerity.
    Austerity in personal terms is cutting out the latte from starbucks, selling the SUV and doing with a car under $5K if not going with public transportation altogether, cancelling vacations, cable, and cellphone usage to absolute minimums.
    What Europe has done is ordered that latte without whip cream.

    The Eurozone during the crisis increased spending as a whole throughout this entire time. The cutbacks have been cutbacks in the increase in spending, not actual cuts Actual cuts would be called tightening your belt, not austerity.

    Greece for it’s part cut it’s budget all right, mainly by defaulting on bonds then administering a 53% haircut to bondholders. Imagine being able to go to the bank and telling them you can’t pay a $100K mortgage, so now you’re declaring it’s worth only $50K. Actual cuts are in the single percentages.

    http://www forbes com/sites/nathanlewis/2012/07/15/austerity-in-greece-sure-and-theres-snow-in-mykonos-too/

    http://mises org/daily/6451/