Budget Austerity: Good for the Goose, Good for the Gander
When Greece and other Mediterranean countries faced a possible default on their national debt, wealthier nations insisted that the debt-ridden countries impose deep budget cuts and increase taxes as a condition for further loans. The result was further economic slowing and increased unemployment - at least in the short term. This was accepted because a default would have certainly caused even greater hardship. The United States fully supported the austerity requirements as prerequisite for further economic support for these nations.
Now it's our turn to deal with our own country's debt problem. Congress passed a law a couple of years ago, which the President signed, that implements automatic budget cuts if an acceptable budget isn't passed. And now what do we hear: this will cause an economic downturn; our nation will be at risk militarily; the cuts will result in extreme hardship.
In the movie "Iron Lady", Margaret Thatcher says, "the medicine (budget cuts) is harsh, but the patient requires it in order to live." The more we put off taking the medicine, the more ill we become, and the more difficult the cure will be.
Congress and the President had the foresight to implement automatic budget cuts. We're not at war and our economy is growing. There's no justification for putting off that first dose of medicine. Practical and reasonable Democrats, Republicans, Libertarians, and Socialists alike should all come together now on this issue. What was good for other nations with debt issues will also ultimately be good for ours.
Shawn Aune
5:33 pm on Tuesday, February 12, 2013
Greece technically did default (possibly more than once). Europe has fixed none of their problems and have only papered over the issues by printing money and increasing debt.
Europe is held together by nothing more than empty promises from politicians who's facade is beginning to wear extremely thin.
http://www.zerohedge.com/contributed/2013-02-12/warning-eu-crisis-back-and-will-be-worsening-coming-weeks
Austerity is destroying the European Union and will do equal amounts of damage to the US economy.
Truth is the debts have grown way too large to ever repay and nobody wants to admit it.
Austerity will keep the game going for a little bit longer but will ultimately do more harm than good.
Let the banks fail if they must. The fact that a single bank failing could destroy the global economy is an indication that there is something extremely wrong with the global economy.
Let it die so we can build something better. Kicking the can down the road will only make things worse.
"We're not at war and our economy is growing."
That statement alone makes me doubt either your observation skills or your integrity.
Shawn Aune
5:37 pm on Tuesday, February 12, 2013
"We're not at war..."
Seriously! Do our tax dollars lead to things like http://i243.photobucket.com/albums/ff43/China-Cat/child-killed-by-obama-drone-strike.jpg during peace time?
John
6:39 pm on Tuesday, February 12, 2013
We're not fighting any wars that would prevent us from making some pretty severe cuts to our defense budget. The US economy has grown pretty consistently since 2010. Do we still need to spend money on defense? Is our economy growing how we'd like it to? No. BUT, neither situation is dramatic enough to justify austerity delays.
Austerity is not destroying the European Union. Without the austerity measures, the European Union would already have disintegrated.
I think that you're throwing around the idea of letting the world economy die like it would just be an inconvenience for a couple of years, and then a better world would rise from the ashes. That's not realistic. We're much better off trying to keep the game going a little longer.
Shawn Aune
10:21 pm on Tuesday, February 12, 2013
"Austerity is not destroying the European Union. Without the austerity measures, the European Union would already have disintegrated."
You are right and I misspoke. Austerity is the only thing keeping the actual union together. The austerity IS destroying the livelihoods of the union's citizens.
The bankers and politicians are making out like bandits. The average citizen, however is having a very rough time.
They should have been allowed to fail. We would have been forced to face austerity THEN.
Yes the entire derivatives bubble would have popped and all sorts of greedy institutions around the globe would have gone under. Those that made the bad bets would have had to pay the price.
Instead they got the government to buy up all the bad bets and take the losses. Now the citizens are being asked to pay up for bad bets they didn't make.
Shawn Aune
10:21 pm on Tuesday, February 12, 2013
"I think that you're throwing around the idea of letting the world economy die like it would just be an inconvenience for a couple of years..."
You think wrong. The world economy is already dead. It is a zombie being kept alive by printing more than $100,000.00 every minute.
It would have been extremely painful. Every day we wait makes it more so. Our debt is more than 100% of GDP and global oil production is peaking.
"We're much better off trying to keep the game going a little longer."
Even you can see that the party is very close to over. Every day we don't face reality the impending collapse looms that much larger.