Austerity has most certainly not happened at all. Otherwise spending would equal revenues.
Government budget cuts at state aand local levels have already been under way, in the last year the government has shed at least 500,000 jobs; Cmon man, it's been happening already and the big compromise package will only make things worse.
The Stimulus failed and there is no mood for another one. But the absence of a failed stimulus is NOT austerity.
It didn't fail, it just wasn't big enough and arguably was made up of the wrong kind of spending (it was essentially a bailout for the states and 40% taxes where as infrastructure and mortgage debt relief would have been more effective). but it didn't fail... If it had failed things would be worse off than if there was no fiscal stimulus; The CBO estimated 3 million jobs were created/saved by the stimulus and most economists - whether they agree with the estimate or not - agree that it helped more than hurt.
Of course I do. But it's artificial and cannot be maintained for long. Soon those rates will rise dramatically.
WSJ and the like have been making this same argument for a couple of years now, just so you know; A couple of years ago they thought our interest rates would have already gone up. This hasn't happened yet, despite the fact that predictions have repeatedly come and gone and interest rates have remained low. The bond vigilantes are not coming, give up; We are not Greece.
Greece is facing high interest rates, as conservatives predict will happen to the U.S. but Greece is a small economy, that does not export much and does not have it's own currency. U.S. treasury bonds are considered one of the safest investments in the world are they not? They will continue to be for the forseeable future, interest rates will not go up as long the economy remains depressed - this is a symptom of the liquidity trap.
Greece debt levels compared to US debt levels(partially projections 2012-2016):
As I said before, people have been warning about the bond vigilantes to no avail for some time -
Bill Gross recently made the prediction:
Keep predicting, and you'll keep on being wrong.
Umm, it does not work.
The Stimulus proved as much.
As soon as the government money runs out, the jobs go with it because the economy has been prevented from going through its natural cycles.
How much was spent per stimulus job? It broke down to something like $278,000 per job.
And it did not even work.
How can you justify that?
It was better than nothing, as I said. We are on a fiat currency the economy does not need to go through "cycles" as if we were on the gold standard. We can have sustained growth without significant contraction... "The Great Moderation".
Actually, that's a different question. The answer is nobody thinks about austerity when times are good.
But times will not be good again until we go through some very rough times.
When the revenues are flowing in, the government spends more.
Now, when times are bad the government spends more.
Because the natural inclination for government is to grow: Ever larger and more powerful.
The only way government will reign back the spending is either a revolution at the polls, or if the state of the economy forces it on them.
You do not need to sacrifice at an alter to get the economy moving again. Infrastructure is not about increasing the size of government at all; All across our nation our roads, sewers, trains, etc are all far behind and/or crumbling in disrepair... Infrastructure investment can help the economy in the short term and we can live through long term austerity once the economy is at or near full employment, which it is not ATM.
But Mame, I thought you said that the economy was recovering? Are you saying that perhaps you were too quick to judge the data you were being fed?
I've said like 50 times the stimulus wasn't big enough, now you have guys like Krathammer (spelling?) and other moderate conservatives even arguing for infrastructure spending, don't you agree that this spending can help in the short term and provide long term benefits as well(because we would use all the shit being built)?
razz
, but now i must rest. tired as shit after pulling weeds all day. and not the good kind.
