In The Next Twelve Months I Can Already Hear The Pundits Saying, Wait For It......

"Nobody could've predicted that slashing budgets crashes economies"

by kos

Thousands of U.S. jobs created per month in 2011 (data source)
 

 

It's not rocket science, yet people are still shocked when austerity doesn't improve economies.

They kept spraying water on the wood, but they just couldn't get the fireplace started. The Post wrote the equivalent in an article on the Greek crisis:

"The government has raised taxes and cut services and is announcing tougher steps every other week. So far it has been to no avail; the economic outlook keeps getting worse, not better."

When the government pulls money out of the economy by laying off workers, cutting government workers' pay, and raising taxes, the expected result is a weakened economy. This is exactly what has happened in Greece. It is difficult to understand what the Post meant in saying "to no avail."

I've been asking conservatives everywhere I can to cite ONE example of a country that ended recession with austerity measures. I just want one example! But there are none. I should ask the same of traditional journalists, who are seemingly so enamored with their GOP budget-busting, entitlement-ending daddies that they can't be bothered to ask that question themselves.

There is a lack of consumer demand in today's economy. This has nothing to do with businesses being hampered by anything—be it regulations or capital constraints or the Kenyan socialist in the White House. If consumers want to buy shit, businesses will make it and sell it. It's that simple.

So how do you build consumer demand? You pump money into the economy! Yup. Stimuli. But absent that, the worst thing you can do is take money out of the economy, and that's what austerity does.
There is no sound economic theory backed by reality and real-world success that suggests otherwise.