July 24, 2010

Economic Double-Dip

A double-dip recession leading to a period of hardship for ordinary people is worth it according to Martin Feldstein because people will not give up their safety net unless the government is disciplined to ignore the people.

Title of the piece: A double dip is a price worth paying

But such a gradual adjustment strategy cannot work politically in countries where voters are sceptical about government promises of future deficit reductions. Immediate action is necessary to make future deficit cuts credible. And painful cuts in government pensions and in public payrolls as well as increases in personal taxes may only be possible while there is a sense of crisis throughout Europe.

So unless the people you elect are willing to destroy your future so the rich can keep "their" wealth, your economy, your jobs and your future will suffer. Would that someone could measure the pain you have to suffer because they forced the economy into a double-dip recession (depression?) because of their austerity goals vs what would happen if someone actually tried to stimulate the economy when world-wide the supply outstripped the demand. And if we had the ability to hold a controlled experiment, which option (stimulus in face of too much supply vs austerity) actually fixed things. As far as I have seen, there are no examples where austerity as a goal has created a healthy economy for real people although it might secure the wealth of a few.

As Digby has noted, causing pain and suffering seems to be the hallmark of the tough guys. They get things done for the rich and powerful. Indeed, they are the purveyors of the shock doctrine.

Posted by Mary at July 24, 2010 12:15 AM | Economy | Technorati links |

Toto,I've got a feeling we're not in Kansas anymore.

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