Quantcast

Is Austerity Madness the problem?

Carol 2012/05/24 18:52:40
You!
Add Photos & Videos

Do you have a sense of where the unemployment rate would be had we not been beset by this austerity madness?

PK: If we had had state and local governments expanding at the rate they normally do, which is by population -- which is also by the way the rate in which it expanded in Bush’s first term – then right there we’d have 1.3 million jobs more than we do right now. That’s just the public sector jobs. There’d be indirect effects. People would have more spending power and there would be private sector jobs as well. That’s something like 2 million jobs right there. When you put it all together my back of the envelope says if we weren’t doing this austerity, GDP would be around 3 percentage points higher right now, the unemployment rate would be at least 1.5 points lower, which means we’d be at 6.5 percent unemployment. That’s not great, but it’s not a depression. We’d be in vastly better shape than we are right now.

JH: I have to ask if you’re constantly banging your head against the table. Everything you write in the book strikes me as so much common sense, and yet even Democrats say the government has to pull in spending when families do. Isn’t that the reverse of the truth? Isn’t it the fact that when families are tightening their belts the government needs to loosen its belt to make up for that loss of demand?

PK: That’s right. The whole mistake that people make is that we’re all like a family. We’re not because we’re interdependent. Your spending is my income and my spending is your income. If we both tighten our belts at the same time thinking that’s going to make us better off, it actually makes us worse off. This is a fundamental fallacy.

I’m not going to complain about being me. I’ve got a good job. I’ve got a solid income. It is frustrating, but it’s frustrating because there are 4 million Americans who have been out of work for more than a year. There’s a whole generation of students who are graduating who can’t find jobs, or can’t find jobs that are making use of the education that they’ve acquired at great expense. Those are the people to be concerned about.

JH: I find it frustrating that there is such a concerted effort to create this alternative reality where Keynesian economics has failed and giving tax cuts to the wealthy will create jobs. It’s a parallel universe. Let me ask you for responses to a couple of common talking points. We hear these again and again. Speaking of wealthy people, are they job creators?

PK: No more than anyone else. In general, anyone who spends money is going to be helping to create jobs, but no more so if it’s coming from a rich person. This notion that we have to have extreme income inequality in order to have a successful, growing economy requires that you forget history that’s live in the minds of everybody over the age of 50. The best generation of economic growth we’ve ever had in America was the generation right after World War II. That was a society in which the rich were not even remotely as rich as they are now. How come we created all those jobs -- all those good jobs -- at a time when the top tax rate was as high sometimes as 90 percent? So no, this just flies in the face of all the experience we’ve had in the last half-century.

Add a comment above

Top Opinion

  • #Justice4Trayvon 629 BLOCKT... 2012/05/25 17:52:59
    Yes
    #Justice4Trayvon 629 BLOCKT CONS
    +4
    When I read this point, it was an "Aha" moment:

    "The whole mistake that people make is that we’re all like a family. We’re not because we’re interdependent. Your spending is my income and my spending is your income. If we both tighten our belts at the same time thinking that’s going to make us better off, it actually makes us worse off."

    I loved this point because I have been saying it for the longest time. I was born in 1953 so I have watched this in my life.

    "The best generation of economic growth we’ve ever had in America was the generation right after World War II. That was a society in which the rich were not even remotely as rich as they are now. How come we created all those jobs -- all those good jobs -- at a time when the top tax rate was as high sometimes as 90 percent? So no, this just flies in the face of all the experience we’ve had in the last half-century."

    The people who have been touting "trickle down economics" are basically bamboozling the generation after us baby boomers.

Sort By
  • Most Raves
  • Least Raves
  • Oldest
  • Newest
Opinions

  • #Justice4Trayvon 629 BLOCKT... 2012/05/25 17:52:59
    Yes
    #Justice4Trayvon 629 BLOCKT CONS
    +4
    When I read this point, it was an "Aha" moment:

    "The whole mistake that people make is that we’re all like a family. We’re not because we’re interdependent. Your spending is my income and my spending is your income. If we both tighten our belts at the same time thinking that’s going to make us better off, it actually makes us worse off."

    I loved this point because I have been saying it for the longest time. I was born in 1953 so I have watched this in my life.

    "The best generation of economic growth we’ve ever had in America was the generation right after World War II. That was a society in which the rich were not even remotely as rich as they are now. How come we created all those jobs -- all those good jobs -- at a time when the top tax rate was as high sometimes as 90 percent? So no, this just flies in the face of all the experience we’ve had in the last half-century."

    The people who have been touting "trickle down economics" are basically bamboozling the generation after us baby boomers.
  • Carol #Justic... 2012/05/25 21:57:00
    Carol
    +1
    Exactly, I could not agree more.
  • Warren - Novus Ordo Seclorum 2012/05/25 17:52:11
    Yes
    Warren - Novus Ordo Seclorum
    +2
    Austerity measures were implemented by Herbert Hoover back in the 1920's.

    hooverville
  • #Justic... Warren ... 2012/05/25 17:55:25
    #Justice4Trayvon 629 BLOCKT CONS
    +1
    My mother schooled us well on how life was after Herbert Hoover became POTUS. Thank you Mom for letting us know what your life experiences were like during that awful time.
  • luvguins 2012/05/25 17:07:46
    Undecided
    luvguins
    +3
    Yes, and no. It all depends upon where it is applied. If the middle and poorer classes are marginalized with austerity like the GOP wishes then you shoot them, the REAL job creators aka the consumers, in the foot. Too much austerity has been shown to prolong recessions in every country that has used it [Japan, Greece. Spain, and now the UK].

    Strange how the Republicans only whine about deficits when they are out of office. Especially since their trickle down economics since 1980 have brought upon our debt beginning with Ronald Reagan. With a 3 trillion dollar yearly debt, and only 2 trillion in revenue what would one expect?

    The truth is that "Trickle-Down" was never intended to help middle income and poor Americans; it was intended to help the wealthy and Corporate America.

    The economic policies of the Reagan era increased the trade deficit and provided easier ways for companies to "hide" money.

    1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967...

    Yes, and no. It all depends upon where it is applied. If the middle and poorer classes are marginalized with austerity like the GOP wishes then you shoot them, the REAL job creators aka the consumers, in the foot. Too much austerity has been shown to prolong recessions in every country that has used it [Japan, Greece. Spain, and now the UK].

    Strange how the Republicans only whine about deficits when they are out of office. Especially since their trickle down economics since 1980 have brought upon our debt beginning with Ronald Reagan. With a 3 trillion dollar yearly debt, and only 2 trillion in revenue what would one expect?

    The truth is that "Trickle-Down" was never intended to help middle income and poor Americans; it was intended to help the wealthy and Corporate America.

    The economic policies of the Reagan era increased the trade deficit and provided easier ways for companies to "hide" money.

    1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967 the wealthiest 20% only accounted for 43% of the nation's income. The trend began in 1982. Between 1967 and 1982 middle-income households were gaining a larger share of the economy. What this means is that between 1982 and 2001 the bottom 80% of Americans have lost share in the nation's economy. This was the inevitable result of Reaganomics. It was an intended result. Political control and economic control go hand in hand. If the control of the economy is not in the hands of the majority of Americans then neither is political control.

    http://rationalrevolution.net...
    (more)
  • #Justic... luvguins 2012/05/25 18:00:32
    #Justice4Trayvon 629 BLOCKT CONS
    +2
    Amen amen amen, you have certainly shared the TRUTH there my friend.
  • Schläue~© 2012/05/24 19:11:16
    Yes
    Schläue~©
    Absolutely.... the madness that follows when whiny people are pissed when they find out they were duped and there isn't enough money to cover the promises made.

    Why do people feel they are entitled to freebies and so gullible to believe politicians promises? Do they not understand that the USA is not some freakin' commune?

    Since when does the U.S. goobermint and loudmouth, jackasses with bullhorns get to dictate how much of one's own money they're allowed to keep? Didn't we have that little spat with Great Britain twice already, 200 years ago?

    Here's a thought.... go out and start your own damn business. Put your own money up front and take the ricks. Spend 60-80 hours a week getting it up & running and be responsible for who you hire. Sacrifice those years while everyone else is out playing because they're living for the moment, only to bitch later on because they haven't planned ahead and stored any nuts.
  • Carol Schläue~© 2012/05/25 21:59:46 (edited)
    Carol
    +1
    PK: No more than anyone else. In general, anyone who spends money is going to be helping to create jobs, but no more so if it’s coming from a rich person. This notion that we have to have extreme income inequality in order to have a successful, growing economy requires that you forget history that’s live in the minds of everybody over the age of 50. The best generation of economic growth we’ve ever had in America was the generation right after World War II. That was a society in which the rich were not even remotely as rich as they are now. How come we created all those jobs -- all those good jobs -- at a time when the top tax rate was as high sometimes as 90 percent? So no, this just flies in the face of all the experience we’ve had in the last half-century
  • Schläue~© Carol 2012/05/25 22:39:17
    Schläue~©
    The 1920' was our last free Capitalism era, before unions and the effects of the Federal Reserve, manipulation of the stock market and taxation by the IRS took effect.
    The boom of the late 40's and early 50's was a product of war, NOT the New Deal.
    Bottom line, the policies of putting people to work on projects that didn't do anything to help the economy failed, and FDR did everything he could to get the USA involved in WW II, to satisfy his personal ambitions and save his political bacon.
    Who did the govt. turn to in that time of need? Henry Ford, the only man that was hiring blacks along-side whites, paying them the same wages and hadn't bowed to unionized labor.
    The tax rate has fluctuated all over the place beginning with a 1%-7% (1913) taxation on American's income and increasing to 60 separate tax brackets (1918) 5 years later that eliminated the bottom 6, lowered the total yearly income starting point, began at 6% and ended at 77%.
    How did we get there? We had a government which lived within its means, and suddenly
    became Europe.
  • Carol Schläue~© 2012/05/27 15:24:08 (edited)
    Carol
    The Depression of 1920–21 was an extremely sharp deflationary recession in the United States, shortly after the end of World War I. It lasted from January 1920 to July 1921.[1] The extent of the deflation was not only large, but large relative to the accompanying decline in real product. [2]
    A range of factors have been identified contributing to the depression, many relating to adjustments in the economy following the end of World War I. There was a brief Post-World War I recession immediately following the end of the war which lasted for 7 months. The economy started to grow, though it had not yet completed all the adjustments in shifting from a wartime to a peacetime economy. Factors identified as potentially contributing to the downturn include: returning troops which created a surge in the civilian labor force, a decline in labor union strife, changes in fiscal and monetary policy, and changes in price expectations.
    Following the end of the Depression of 1920-21, the Roaring Twenties brought a period of sustained economic prosperity

    The end of World War II led to the end of the Great Depression and the start of a long period of economic expansion through the 1950s. It is quite ironical that the most destructive war in history would contribute to the emergence of the stronges...

    The Depression of 1920–21 was an extremely sharp deflationary recession in the United States, shortly after the end of World War I. It lasted from January 1920 to July 1921.[1] The extent of the deflation was not only large, but large relative to the accompanying decline in real product. [2]
    A range of factors have been identified contributing to the depression, many relating to adjustments in the economy following the end of World War I. There was a brief Post-World War I recession immediately following the end of the war which lasted for 7 months. The economy started to grow, though it had not yet completed all the adjustments in shifting from a wartime to a peacetime economy. Factors identified as potentially contributing to the downturn include: returning troops which created a surge in the civilian labor force, a decline in labor union strife, changes in fiscal and monetary policy, and changes in price expectations.
    Following the end of the Depression of 1920-21, the Roaring Twenties brought a period of sustained economic prosperity

    The end of World War II led to the end of the Great Depression and the start of a long period of economic expansion through the 1950s. It is quite ironical that the most destructive war in history would contribute to the emergence of the strongest and biggest economy in the world. The confidence on the economy was obviously brought about by the country's victory in the War. Tempered by strong collaboration between the government, businesses and the consumers, the U.S. emerged from the War a lot stronger and economically strengthened. Industrial expansion during wartime brought economic impetus that would be carried on even after WWII. The fact that most of the major economies were slow to recover from the after effects of the conflict placed the United States at absolute and relative advantage over both its allies and its enemies.

    Article Source: http://EzineArticles.com/1565016
    (more)
  • Schläue~© Carol 2012/05/27 15:36:32
    Schläue~©
    The 's' didn't print when I wrote 1920's.

    The period from '21 up until the crash in '29 is what I was referring to.
    That's when Henry Ford revolutionized production with the Model T and the later version of the 1928 Model A.
    He redefined manufacturing, world-wide and didn't cave to union pressure.
  • Carol Schläue~© 2012/05/28 16:44:16
    Carol
    FYI
    What nobody knew at the time was Henry Ford never wrote that apology. He didn't even sign it. The letter had been composed by the chairman of the American Jewish Committee himself, and signed by one of Ford's aides. It was just part of a negotiated settlement for a libel lawsuit. The Dearborn Independent had accused a prominent labor organizer of being part of a conspiracy of "Jewish bankers" to seize control of national wheat production and turn it over to the Communists. The organizer filed a $1 million libel suit against Ford, who chose to settle rather than face another humiliating ordeal in the witness stand.

    By this time, Ford had already racked up an abominable labor relations record. Which is a hard thing for many people to believe, since he was famous for instituting the five-dollar minimum wage. What nobody seems to remember is that the Ford company subsequently rescinded that wage. And that it was only available to married WASPs of high moral character who submitted their homes to surveillance by the Ford Motor Company. This didn't exactly endear Ford to the labor unions, and that antipathy was reciprocated. Ford believed the unions were controlled by Jewish Communists, so he did his best to break them.

    In 1937, after GM and Chrysler both negotiated contracts with ...

    FYI
    What nobody knew at the time was Henry Ford never wrote that apology. He didn't even sign it. The letter had been composed by the chairman of the American Jewish Committee himself, and signed by one of Ford's aides. It was just part of a negotiated settlement for a libel lawsuit. The Dearborn Independent had accused a prominent labor organizer of being part of a conspiracy of "Jewish bankers" to seize control of national wheat production and turn it over to the Communists. The organizer filed a $1 million libel suit against Ford, who chose to settle rather than face another humiliating ordeal in the witness stand.

    By this time, Ford had already racked up an abominable labor relations record. Which is a hard thing for many people to believe, since he was famous for instituting the five-dollar minimum wage. What nobody seems to remember is that the Ford company subsequently rescinded that wage. And that it was only available to married WASPs of high moral character who submitted their homes to surveillance by the Ford Motor Company. This didn't exactly endear Ford to the labor unions, and that antipathy was reciprocated. Ford believed the unions were controlled by Jewish Communists, so he did his best to break them.

    In 1937, after GM and Chrysler both negotiated contracts with the unions, Ford announced: "We'll never recognize the United Automobile Workers Union or any other union." In May of that year, 60 UAW members and some local journalists were jumped by a large contingent of Ford security goons outside a plant in Dearborn, Michigan. One of the union men died four months later from his injuries. The incident was widely reported in the news media, and was known as "The Battle of the Overpass."

    During the fallout, the National Labor Relations Board found Ford Motor Company in violation of the Wagner Act, which jeopardized millions of dollars in federal contracts. Still, Ford would continue to hold out for another four years, before finally giving in. Ford Motor Company became the last Detroit automaker to recognize the UAW.
    (more)

See Votes by State

The map above displays the winning answer by region.

News & Politics

2014/09/30 18:23:01

Hot Questions on SodaHead
More Hot Questions

More Community More Originals