Austerity Doesn’t Work

If you’ve been paying attention, you know what is coming. Krugman has been working on it for weeks in his blog. His column today just sums it up.

Pain Without Gain

”Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.”

In short, we’ve made the situation worse by cutting our spending. We cut new construction so there are now no new construction jobs. And my favorite pet peeve -- unemployment was bad so we made it worse by unemploying teachers. We laid off thousands and thousands of teachers in an attempt to cut spending. Instead of saving us money, it just cost us more in unemployment and cost our kids a decent education in the process. There’s a term for it -- penny wise and pound foolish. (As I looked up a link to explain what that idiom meant, look what came up.)

”Education budget cuts are penny wise and pound foolish – public education is an investment in our future.”

Can there be a clearer sign from the internet gods that what we are doing is foolish?

Don Brown
February 20, 2012