The Absurdity of Conservative Economics

There's another "economy lesson" floating through the blogosphere, courtesy of the conservative propaganda machine. This one attempts to defend the Republicans latest round of budget brinkmanship by once again comparing the federal budget to your household budget. "Oh, my! Imagine how you'd feel if you were trillions of dollars in debt!" Yeah, I'd feel like some bank loan officer wasn't doing his/her due diligence.

The "Fiscal Cliff" is a wholly owned subsidiary of a Republican polity whose only motivation is antipathy for the President and disdain for the poor.

The US economy is no more like your household budget than the Idaho militia is like the US Marine Corps.

There will always be a national debt and there should be. Budget deficits have been decreasing and will decrease more as the economy continues to improve. Had it not been for the obstructionist practices of poor-loser Republicans, we'd have a stronger economy and even lower deficits. As it is, deficits have fallen from over 10% when Bush left office in 2008, to 7% in 2012.

What Republicans refuse to acknowledge is that George W. Bush left an economic disaster in 2008, unemployment was rising, revenues were falling (both due to his crazy-ass tax cuts and to loss of jobs), and spending on safety net programs were necessarily rising (that's what they do when people lose their jobs). Economists will tell you that recovering from a deep recession like the one Republicans left, can take ten years (Japan has suffered for decades).

But, if you're a Republican, look on the bright side. If Republicans can succeed in denying the vote to women and [even more] minorities, and they can come up with a candidate that isn't a dick (or doesn't keep stepping on his dick), they may win the Presidency in 2016. Then they can claim credit for reducing deficits in 2018 in their attempt to win back the House.

What Krugman & Stiglitz Can Tell Us by Jacob Hacker and Paul Pierson | The New York Review of Books

Excerpts:
We may be the richest nation in the world, but poverty is higher and social mobility between generations lower than in other rich nations. In other respects, our model is bloated: we release far more carbon dioxide and use far more water on a per capita basis; and we spend far more on health care, while leaving tens of millions uninsured and achieving health outcomes that are mediocre at best.

The spectacular profits of the energy industry, for example, rely heavily on the failure of regulation to incorporate fully the social and economic costs associated with environmental degradation, including climate change. Similarly, the increasingly aggressive activities of Wall Street—whether in the marketing of unsound mortgages, the use of excessive leverage, or the irresponsible use of derivatives—create huge risks for the economy as a whole. Yet these risks are largely not taken into account in the prices paid in financial markets. Without effective regulation, the costs are borne by all of us—most acutely by the struggling millions who have been pushed out of jobs.

The economics is really easy. If we were to spend more money at the government level and ... rehire the schoolteachers, firefighters, police officers who have been laid off in the last several years because of cutbacks at the state and local level, we would be a long way back towards full employment. ... Right now, there just is not enough spending, and we need the government, which can do it, to step in and provide the demand we need. ... We’ve had austerity in the face of a recession, in a way that we have never had before since the 1930s. ... And the results are clear: it’s disastrous. 

What Krugman & Stiglitz Can Tell Us by Jacob Hacker and Paul Pierson | The New York Review of Books