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Monday, September 23, 2013

'How Austerity Wrecked the American Economy'

Kevin Drum:

How Austerity Wrecked the American Economy, by Kevin Drum: With Washington DC's attention focused on the antics of Ted Cruz and the tea partiers, who are threatening to shut down the government unless Obamacare is defunded, it's easy to lose sight of the bigger picture: Aside from Obamacare, the budget battles of the past three years have been exclusively about the Republican obsession with cutting spending while we're trying to recover from the worst recession since World War II.
This is lunacy, and it's the subject of "Death by a Thousand Cuts," my cover story in the current issue of Mother Jones. ... The ... austerity zealots ... remain obsessed with slashing spending despite the fact that (a) this is unprecedented in recent history and (b) the deficit has already been slashed repeatedly over the past three years ...
Government spending at all levels is far below the level of any other recent recovery. Sixteen quarters after the end of the recession, spending during past recoveries has been 7-15 percent higher than it was at the start. This time it's 7 percent lower, despite the fact that the 2008-09 recession was the deepest of the bunch. Reagan, Clinton, and Bush all benefited from rising spending during the economic recoveries on their watches. Only Obama has been forced to manage a recovery while government spending has plummeted.
And there's no end in sight. Ted Cruz will lose his battle to defund Obamacare. But the tea partiers have already won their battle to cripple the American economy and Obama's presidency with it.

    Posted by on Monday, September 23, 2013 at 10:35 AM in Economics, Fiscal Policy, Politics | Permalink  Comments (65)

          


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