🚀 go-pugleaf

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