The Path of Austerity is Downhill all the Way
You might look at the national debt, snowballing by the second as interest piles up, and wonder why any government would consider running a deficit. Surely, that’s reckless, you might think. By adding more debt you add more interest, and interest on the interest… and on and on. But you should think it through before you accept solutions like Paul Ryan’s “austerity” budget.
Austerity is not the solution. It would only make the problem worse (as Britain and Europe are finding out – see illustration above). The solution can come only from growth. And growth needs money to prime the pump.
Remember the old story about the farmer who rented space for a roadside sign to advertise his vegetables to passing motorists. He did so well that he figured he might as well put up another sign to attract motorists coming from the other direction. That proved so effective he was able to send his son to college. The kid majored in economics and came home with a prestigious degree.
The farmer’s son studied the economic climate and concluded a downturn was due, so he advised his dad to cut costs by taking down one of the signs. Sure enough, the farmer’s sales declined, and the son advised cutting costs even further by taking down the other sign. You guessed it, sales plunged even more and the farmer went out of business.
The truth is that when a country’s economy stalls, the government has to kick start it or it will get worse. You can’t depend on private investment to fuel a recovery. In this global economy, business has no obligation to any particular country. Private money goes where it can make the most profit not where it can do the most good.
If the government uses deficit budgeting wisely and succeds in reviving the economy, business will return because in a thriving economy private investment can usually make an attractive profit. This will accelerate the recovery, and eventualy the government will recover its investment - with interest – through increased tax revenue.
This process is often described as an economic theory, but it is a simple statement of fact. Money attracts money, austerity breeds more austerity. As the Bible says, to him that hath shall be given and to him that hath not even that which he hath shall be taken away.
You might not agree with the way government spends your tax money. I certainly hate to see my taxes used to produce bombs and bullets for senseless wars. But the need for government spending is indisputable.
Think about it. If the government spends money on projects that produce dividends, surely that would be a good thing? Let’s say there’s a fertile piece of land that’s across an inlet from a major city, and let’s say the government builds a bridge so farmers over there can produce crops and sell their produce to the city dwellers. Doesn’t that make sense?
By their messianic dedication to austerity, today’s Republican leaders are proposing a disastrous course for America. Instead of blindly insisting on slashing government spending, they should join their Democratic opponents in figuring out the most productive ways to spend tax dollars. Naturally, spending would have to be reined in later – after the economy is up and running on its own.
When your car is stuck in a bog, you don’t sit inside and save gas; you get out and push.
Share this:
9 comments
Vote for Ron Paul and leave the Democrats alone!
There are none so blind as those who will not see.
Janice you are impossible to reason with. Ron Paul has as much chance of winning the Presidency as the proverbial snowball in hell. Billy G.
It is not about who wins, it is about whose values I respect. Democrats do not respect Blacks. They take them for granted. I voted for Obama because I trusted him. I will not vote for this man or any Democrat unless there is something else to go along with the Democrat party. 90% of the time, I don’t vote for the major parties. I feel the same about PNP and JLP – they use Jamaicans.
Smart girl, Janice, so you just throw away your vote. I am glad President Obama is for the people, ALL the people not just the black ones. Ron Paul isn’t going to do any more for the black people of America than any of the other white presidents who served before him. Be careful of who you are listening to. Everyone has their own agenda, or axe to grind as it were, and some are so filled with hate that they tend to twist the facts to fit their distorted view. President Obama’s ex pastor and the muslim leader of America come to mind. I would hate to be under their rule. Billy G.
That is the point. I want Black people to stop waiting for “saviors” and believe in this delusion of inclusion. Democrats are not nor have they ever been for Blacks. Jews voted for Obama because of Israel; Gays voted for him because of don’t ask don’t tell policies; Latinos voted for him because of immigration. He has given to those groups but nothing to the Blacks as with most Democrats. Obama is the guardian and ceo of bankers and multinational corporations. He does what he is told to do. The sun is too hot and no one wants to work in the fields.
I don’t know you Janice but your analysis is spot on. I too am a supporter of Ron Paul. His isolationism, his adherence to sound financial policy, etc. He is never given a fair shake in our corrupt 2 party system. You are correct neither party is fair or honest. They merely make enough BS promises to enough identity groups to ensure their continued survival. We need politicians with real ethics and integrity. Too few of them. As for this blog, the crisis in Europe is why deficit spending is not the way to go. All of their problems can be directly attributed to too much debt. Just be honest George. This idea that govt overspending is the way to economic prosperity has NEVER worked. Quit perpetuating that nonsense
Be careful, Janice and Rob. You are still young and have to earn a living. The world you find your self in after the US elections in November could be terrible. I am retired and close to the end of my trail. I don’t have as much to fear as you do. If you petulantly throw away your vote and indirectly contribute to the election od a Republican president and Congress, you are likely to regret it. America under Romney and his allies would be a nightmare of poverty and misery. The world would be torn apart by even more war and unbridled greed. It would give me no pleasure to say “I told you so.” So think it through and you will see that there really is no other reasonable course to follow in these critical times but to vote for Obama and the Democrats.
You guys do know that Ron Paul is a racist, and would do away with the : Energy, HUD, Commerce, Interior, and Education. He has called for elimination of other federal agencies such as the U.S. Department of Health and Human Services, and the Internal Revenue Service,[20] calling them “unnecessary bureaucracies”. He would also eliminate the elimination of the Federal Emergency Management Agency (FEMA),he often requests earmarks for bills that he supposedly knows will pass no matter which way he votes. For example, during 2007, he requested about $400 million in earmarks in bills he voted against. from wikipedia, eliminate 5 cabinet-level agencies (Education, Interior, Commerce, Energy, and Housing and Urban Development)
privatize the FAA and the TSA
cut the federal workforce by 10%
cut funding (down from 2006 levels) for the
Food and Drug Administration by 40%
Centers for Disease Control by 20%
Department of Homeland Security by 20%
National Institutes of Health by 20%
Environmental Protection Agency by 30%
Substance Abuse and Mental Health Services Administration by 20%
cut the Department of Defense budget by total 15%; eliminate all foreign war funding
freeze funding for most other federal agencies at 2006 levels
eliminate all foreign aid
eliminate international drug programs
substantially reduce federal travel
eliminate international organizations and commissions
administer Medicaid and other joint federal-state social welfare programs (SCHIP, food stamps, etc.) through block-grant funding mechanisms to the states
Revenue Changes
cut the top corporate tax rate to 15% (down from 35%)
allow companies to repatriate capital without additional taxation
permanently extend the Bush administration tax cuts
eliminate capital gains and dividends taxes
eliminate estate and gift taxes
end taxes on personal savings
sell federal lands and other federal assets
Other Economic and Regulatory Measures
repeal the new healthcare law (“Obamacare”) as well as the Dodd-Frank and Sarbanes-Oxley financial services and banking regulations
cancel certain “onerous” regulations instituted under executive order by previous presidents
conduct a full audit of the Federal Reserve
seek competing currency legislation “to strengthen the dollar and stabilize inflation”
Social Security and Medicare commitments to older workers and retirees would be honored, while workers younger than 25 would be given the option to opt out of participating in these programs. The Veterans Administration would be the only agency whose funds would be maintained at current levels of growth. Federal-state social welfare programs like Medicaid would be shifted from the mandatory section of the budget to the discretionary section, so that Congress would need to approve funding allocations each year.[39]. Paul opposes laws that require health insurance to cover pre-existing conditions. He argues that “once insurance companies are required by government to insure against preconditions, it’s no longer insurance – it’s a social welfare mandate and will result in bankrupting the insurance companies, or they will be bailed out by a government subsidy, further bankrupting the government. So far no one has mandated insurance companies sell fire insurance to a person whose house is on fire.”[237]
During a primary debate in the 2012 presidential election campaign, Paul was asked who would pay for the medical care of a previously-healthy 30-year-old man without medical insurance who suddenly falls seriously ill and requires six months of intensive medical care.[258] Paul said that “what he should do is whatever he wants to do, and assume responsibility for himself.” When asked specifically whether the man should just be left to die, Paul then replied that he should not be left to die, but should be able to rely on the kindness of neighbors, friends, churches, and charities, as would have occurred back when Paul worked in a church charity hospital early in his career, at a time when healthcare paid for by the government was not available.
The guy is dangerous.
Leave a Comment