The Republi-CON Double Dip Recession, Not a New Ice Cream, But It'll Make You Scream

UPDATE VII: "It is said that only a fool learns from his own mistakes, a wise man from the mistakes of others."

Read The New York Times, Pain of British Fiscal Cuts Could Inform U.S. Debate, which finds:

"A year into Britain’s controversial austerity plan, retail sales have had the sharpest monthly plunge in 15 years and real household income is expected to fall 2 percent this year."

UPDATE VI: "[S]lashing spending in the face of high unemployment is a mistake. Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong. . .

Which brings me back to what passes for budget debate in Washington these days.

A serious fiscal plan for America would address the long-run drivers of spending, above all health care costs, and it would almost certainly include some kind of tax increase. But we’re not serious: any talk of using Medicare funds effectively is met with shrieks of “death panels,” and the official G.O.P. position — barely challenged by Democrats — appears to be that nobody should ever pay higher taxes. Instead, all the talk is about short-run spending cuts.

In short, we have a political climate in which self-styled deficit hawks want to punish the unemployed even as they oppose any action that would address our long-run budget problems. And here’s what we know from experience abroad: The confidence fairy won’t save us from the consequences of our folly. "

Read The New York Times, The Austerity Delusion.


UPDATE V: What if "fiscal issues are just an excuse for ideologically driven policies to lower taxes on well-off people and business while reducing government programs." Read the Washington Post, What if we’re not broke?


UPDATE IV: Higher oil prices and "the GOP’s willingness to shut down the government or default on the debt if Democrats don’t sign onto harsh spending cuts that will reduce growth and employment through the rest of 2011." The Republi-con formula for a double dip recession. Read the Washington Post, Will we kill the recovery?

And is it part of the Republi-con 2012 election strategy?


UPDATE III: "It really is worth repeating: no matter how much the right-wingers may like to claim that the US government is “broke”, it’s not, in any normal sense of the term." Read The New York Times, Unbroke America.


UPDATE II: More on that planned Republi-con double dip recession.

"Though we finally seem to be climbing out of a very deep hole, many people on the political right want to send us sliding right back down again." Read The New York Times, How to Kill a Recovery.

And an "[i]ndependent economic analysts, including from the investment firm Goldman Sachs - hardly known for liberal or bleeding-heart tendencies - have concluded that the $61 billion in current-year budget cuts being demanded by House Republicans will shave up to two percentage points off the nation's growth rate and cause the loss of more than half a million jobs." Read Moody's Analytics, A Federal Shutdown Could Derail the Recovery.


UPDATE: "A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis." Read the Washington Post, GOP spending plan would cost 700,000 jobs, new report says.

"[N]o matter how morally satisfying austerity may be, it’s the wrong answer. Hoover’s austere instincts worsened the Depression. Roosevelt’s postelection reversal helped, but he also prolonged the Depression by raising taxes and cutting spending in 1937. Only the giant stimulus program known as World War II finally ended the Depression. When the private sector is hesitant to spend, the government has to — or no one will."Read The New York Times, Why Budget Cuts Don’t Bring Prosperity, which includes this informative graph:



And if you forgotten, read about "The Great British austerity experiment," which will result in years of "unnecessarily slower growth and higher unemployment."

"The takeaway lesson should be 'austerity does not work; don't go there.' Unfortunately, in the land of faith-based economics, evidence does not count for much. The UK may pursue a disastrous austerity path and those of us in the United States may still have to follow the same road anyhow. But we opponents of that course all appreciate the willingness of the UK to demonstrate the foolishness of this action."