Digby: Austerity Failing in Europe

Hullabaloo, via AlterNet:



Austerity Failing in Europe


A funny thing happened on the way to deficit reduction:

I've learned that Krugman is always right on economic matters.

oh well, they're probably better outside of the tent anyway...more freedom...

was claiming that austerity measures taken by Germany were responsible for the uptick in their GDP over the past several months.

Upon further investigation, it doesn't quite pan out!

"Remember the German economic boom of 2010?

Germany’s economic growth surged in the middle of last year, causing commentators both there and here to proclaim that American stimulus had failed and German austerity had worked. Germany’s announced budget cuts, the commentators said, had given private companies enough confidence in the government to begin spending their own money again.

Well, it turns out the German boom didn’t last long. With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s."

http://www.nytimes.com/2011/02/23/business/economy/23leonhardt.html

What we need to do in the US with our out of control unemployment and national debt and spending on the military is clear:

Lower the retirement age to 60 (55, ideally). Raise the earnings cap on OASDI payments or eliminate it entirely until the crisis is over.

Return to the progressive income tax structure and make the rates confiscatory on incomes >$5,000,000 per year.

End Bush's wars, close most overseas bases, redefine the military's role as one of self defense and disaster aid. Cut the Pentagon budget 10% per year until it is in line with what other countries spend. Force the brass to make the hard decisions for once in their coddled careers.

Start improving infrastructure. The electrical grid is on its last legs, the highway system is crumbling, especially at the bridges, and our rail system is a joke. All these things will need to be improved before industry will even think about moving back here in sufficient quantity. Part of our infrastructure is our health care system. Make full price Medicare available to all. Insurance companies can offer Medigap or go out of business, their choice.

The last thing we need is austerity, every dime of which is more money being looted from an already very shaky economy.

to go that route anyway. And yes, us real progressives (along with imaginary socialists) are crazy and are the problem. We're "the left". If we would just shut up and let the deficit reduction games begin, it will be different here. Who can out Reagan the other, the Republicans or the Democrats? And let's make sure proposals like The Peoples Budget stay defeated. Afterall. there's some rightwing redneck district we have to win somewhere, right?