Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,†that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.
Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.
The libertarian crew at Reason magazine will be working overtime coming up with a reason why none of this is actually true.
The beatings will continue until morale improves.
Gov’ts just need to stick an aspirin between their knees.
But it feels SOOOOOOO damn good to inflict suffering in others!
Oh, and “Reason” should change its name to “Excuse” – ’cause there ain’t much rational thinking going on over there, but there’s an awful lot of rationalization.
Just love you all’s comments. I wish I knew how to spell the possessive of y’all. Living in the South is soooo wonderful!
The rationale of austerity economics is reminiscent of the dimwitted carpenter who complained after he sawed off the end of the same board three times – that it’s STILL too short!!!