French Reject Austerity; Are US Republicans Listening?
This past weekend French voters denied their incumbent president Nicolas Sarkozy reelection in a resounding rejection of austerity policies which have kept European economic recovery out of reach. In arrant disavowal of this message and mounting real world evidence to the contrary, Republicans in the U.S. continue their own pursuit of spending cuts policy.
Sacrifice and spend is the basis of the GOP strategy. Its most recent incarnation of this budget approach is embodied within the Ryan Budget which does reduce the deficit but sacrifices funding for numerous social and health programs while extending generous tax cuts and increases defense spending. As of this morning, the House of Representatives approved a bill which retains defense spending levels while cutting $18 billion from Medicaid and the President's housing assistance program for struggling homeowner's this year and $250 billion over the next decade. It also cuts funding from a regulatory agency that oversees controlled collapses of failing financial firms in an effort to avoid what was witnessed during the Great Recession.
While the concerns are warranted and efforts by the conservatives in Washington to reduce national debt is understandable, as the world has seen in Europe the timing is inappropriate. Debt reduction is a long-term goal while creating the conditions for recovery from a deep economic crisis involves short-term policies. The two are incompatible with one another. Given this, there are balanced approaches which can be implemented over time while maintaining the resources needed for recovery in the short-term. Two similar plans have originated in congressional committees over the past 3 years. All included sustainable spending cuts and responsible tax increases. However, each of the plans were thwarted by the No Tax pledge signed by the vast majority of congressional Republicans.
In principle, the newly elected French President, Francois Hollande, has declared his wish to take a similar balanced debt reduction, growth fostering strategy as those proposed in the US. Spending in the short-term needs to be targeted and geared towards investment. The retraction in this aspect is a significant reason why the continent sits in constant fear of a second downturn and why countries like Spain are experiencing a double-dip recession. The US's stimulus stemmed the tide of job losses and the investment it was able to make helped create conditions for the private sector to begin hiring again. As was evident from the May 2012 job report April was the 26th straight month for private sector growth. As stimulus funding faded and budget cuts took effect the primary source of job loss was in the public sector, in government jobs. These losses negated many of the gains made in other sectors and illustrates how austerity diminishes the overall recovery.
For the Republican Party the question avails itself, will European public outcry and real world evidence running counter to their austerity policies result in a predictable dismissal of the outcomes as testament to the detriments of socialism? Or, with their own particularly low public approvals will they consider this a portent of things to come and acknowledge the need to break from party line principles to find a way to listen without pretense?
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Paul Nevins
Livia Ellis
Francesca Biller
femme forte
Jaime Franchi
Lea Lane
Salon.com
Comments
...then we'll decide if this was a good move.
http://www.rooseveltinstitute.org/new-roosevelt/federal-budget-not-household-budget-here-s-why
Thanks, I did read the article associated with you link. It's not convincing.
A little of your own thought should persuade you that the only difference between our national budget and what happens when you try to balance your checkbook is that you don't have the priviledge of printing the money with which you repay your creditors.
On the national stage this simply delays, and cheapens (through inflation), the repayment of our obligations. They, nonetheless, must be repaid. Failing to repay them will allow others to conclude that we are insolvent; and that will be the end of America as we know it.
It's really simple. Please don't let the Roosevelt Institute do your thinking for you on this subject. Its hero had a significant impact on the process that has led us to the mess in which we find ourselves today.
And, just in case you still don't get it, let me summarize my side of this argument in just three, . .. . err. . . five. . .. err. . . . . seven . . . ahhhhhhhhhh. . . . whatever number of words:
USSR
Cuba
Greece
Italy
Portugal
Spain
Ireland
a gifted surgeon. If we allow the TPer's who have about as much skill as a veteran union butcher, then we are really in for it. People are getting it. The question is how long will we manage the inequity of Defense, Big Pharma and Insurance behemoths to be put in check. The Congress has put the brakes on to such a degree that it is no wonder that we are being challenged as a viable refuge for the world equity markets. It will be a challenge to the many. Not the few who can weather tough times.
Spending adjustments needed to occur. /! /
Odd that they did not see reduced public spending would have adverse effects on the economy. Adding tax increases at the same time just multiplied the negative effects.
Since tax policy has 3x the stimulative effect over spending policy, they should have counterbalanced the public sector spending cuts with private sector tax cuts.
If every billion in spending cuts were countered by 333 million in tax cuts, the negative effects on the economy would have been eliminated.
When government steps out of the economy, someone has to step in to take its place.
It just seems someone, somewhere, should have known that two negatives don't make a positive.
Even Keynesian economists should have seen this coming.
Nobody looks to France for much of anything. They have had one of the worst unemployment rates in Europe for a decade, it's illegal to work more than 35 hours per week, and they're more worried about English words creeping into their has-been society than in dealing with their minority Muslim populations that regularly "protest" the racist French society by burning cars and destroying things.
I lived there for a while and their society is clearly schizo.
In 2010 over 1,000 cars were burned in riots. And in 2003 over 5,000 people died from not having air conditioning.
I pretty much don't look at France for how to do anything.
It's very hard not to laugh at this one. Before writing such statement, you also need to understand simple arithmetic, which you clearly don’t (which is also at par at your understanding of socialism). You need to stop projecting your own ignorance onto others.
Ballooning health care cost: is Medicare the culprit?
Can you?
Balancing checkbooks seem to be easy. You just need to cut the budget of federal programs (combined with no increase in taxes). If Paul Ryan doesn’t understand checkbook arithmetic, are we expecting UC to understand it as well?
Ripping apart Ryan’s budget Plan 1000 deaths at the time…
Speaking of math, perhaps you would like to comment here:
The case against the U.S. health care system
It's that simple.
When the party they vote into office can't fix everything by spending borrowed money they get voted out of office. The process repeats itself until the bottom falls out and the IMF steps in.
Quite simple, really.