Paul Krugman has a new article in the New York Times. Krugman's article has to do with the pervasive idea many economists have that austerity in the face of recession and global financial crisis is and was a good thing. Krugman, as you might expect, believes it was not and actually did a lot more harm than good.
Krugman points out that the International Monetary Fund (IMF), which had previously been a stalwart advocate for austerity measures, now seems to be backing away from that in light of the new evidence in Europe that such measures have created even more economic destruction than before. But, Krugman points out, that doesn't seem to be convincing many other people.
Many economists, he claims, still believe that austerity is the only solution to our economic woes, and are staunchly ignoring the evidence to the contrary, instead opting for blind allegiance to the mantra of spending cuts, spending cuts, spending cuts.
If you think we're immune to this line of thinking in the US because we haven't seen federal austerity, think again. We're a little behind Europe, mostly due to the gridlock and partisanship in Washington and having a Democratic president, but we still have Republicans who believe austerity must occur here as well. Consider Mitch McConnell (R-KY.) who recently said that "The tax issue is finished" meaning he would not allow any more tax increases on anyone, ever, as long as he could.
McConnell and his Republican allies are not alone, either. Budget hawks are circling the Hill right now, screaming about the deal struck to avert the fiscal cliff because it cut no spending, and demanding across the board cuts to offset our debt.
This blind allegiance to spending cuts, despite expert evaluation and mass evidence to the contrary, is very disheartening. McConnell's declaration that taxes are finished and will not be debated shows, in my mind, a serious lack of foresight. That same lack of foresight is likely a culprit in the continued push for austerity. And, keep in mind, we have had austerity at the state level for years now, and look how that's turned out. Municipalities forcing people to pay for fire department services, or no longer hiring police officers or rescue personnel. Cuts to education. Cuts to mental health services. These are all symptoms of state-based austerity. It is wreaking havoc on local governments and townships, and we don't need that kind of chaos from the federal level.
As I've said in the past, we can make government more efficient. We can streamline the system of regulation, reduce the number of departments, weed out waste, fraud, and abuse, and slim down how our government functions without sacrifcing it's important functions. But simply cutting the budget down to size is NOT an answer. It takes planning, time, patience, and cooperation to make wise, reasonable changes. Until we regain a Congress that is willing to look each other in the eye and pass bills for the good of the people, that won't happen.