E.J. Dionne Jr. asks and answers whodunnit today in his column, but also asks and answers whydunnit. “It” in this case is trying to fix a long-term economic slump with austerity — tax cuts and benefits cuts in the name of deficit reduction. The who is, erm, everyone — academics and politicians and think-tankers and policymakers. The why, Dionne argues, is that people who like austerity will push it as the answer to any problem, and there aren’t enough people in power who don’t like austerity. Hence, what we have is a president and a Senate seemingly opposed to austerity, going around cutting taxes and sequestering and worrying about deficits even as they denounce those same policies. Thus, cutting entitlements and taxes is proposed as the solution to various economic troubles, and it seems to prevail despite who gets elected.
Since those matters are resolved — austerity forever and there’s nothing to be done about it — the commentariat is left to ponder if it’s all that good an idea to cut taxes and spending in good times and bad, particularly if, as Dionne points out, programs that benefit the well-to-do, like air traffic control, don’t end up getting cut … but Head Start does.
edbyronadams argues that it is in fact more important to focus on decreasing deficits than reducing unemployment:
Fiat currency is based on faith. When deficits run so high for an unsustainable period, reason begins to test that faith. When faith is lost in the currency, cataclysmic economic problems ensue. That is why deficits matter.
Donald Fields doesn’t think the faith of the world is particularly at risk:
The rest of the world had enough faith in the US to lend us money at incredibly low rates of interest. Seems the Chinese have more faith in America than many Americans.
edbyronadams counters that faith is dependent not just on the actual circumstances of the American economy, but the perception that we act responsibly:
That faith is bolstered by our efforts to curb the deficit. You would be amazed at how fast it would evaporate if we didn’t face the facts.
Pilot1 suggests that even the proposed austerity measures have to fight against increasing entitlements, so it’s tricky to say that austerity’s winning:
Even a child knows that the completely out of control government spending coupled with ridiculous laws like ACA followed up by out of control regulation is killing any chance of a meaningful recovery. But I guess all you care about is getting your freebies.
Epiphron says that Democrats argue exactly the opposite as Republicans, which actually means they’re using the same tactic of what-we-wanted-anyway-will-fix-the-current-problem:
That’s the claim – and that’s what Republicans claim as well. That shrinking government will lead to more jobs. In reality, both are simply using the economic rationale of “job creation!” to get obtain own partisan agenda. Republican deficit reduction is their partisan attempt to hack away at the programs they hate, and Democratic stimulus is their partisan attempt to get more funding for the programs they love. EJ Dionne acts like its only Repubs that do it – time to take the partisan blinders off.
Meade8484 counters by saying when politics are removed from the equation as much as possible, experts still think the stimulus did a lot of good against unemployment:
The Booth School of Business at the University of Chicago surveyed a panel of economic experts of different political persuasions about the impact of the president’s stimulus package: eight out of 10 said it had contributed to lower unemployment by the end of 2010.
When asked if the policy was worth it, four times as many economists agreed as disagreed.
And George_S says that those experts by definition are removed from economic reality:
All those economists have a job. Sixteen million Americans do not. But that is irrelevant.
This is true. Homeless economists would have polled very differently, PostScript suspects. And their answers would be equally irrelevant to actual economic policy.