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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

upside down politics « Previous | |Next »
January 2, 2013

Washington appears to think that the road to recovery for the US economy is austerity through cutting public spending ---deficit cuts, as it were, are the necessary road to recovery. It is a world of upside down politics because economy recovery and long -run growth comes from stimulus not austerity. The austerity crowd are exploiting the fiscal cliff to push their social benefit-cutting agenda that has nothing to do with the current crisis of low economic growth.

PettyBXmaspolitics.jpg

As Paul Krugman argues:

long-term economic growth hasn’t been a steady process; it has been driven by several discrete “industrial revolutions,” each based on a particular set of technologies. The first industrial revolution, based largely on the steam engine, drove growth in the late-18th and early-19th centuries. The second, made possible, in large part, by the application of science to technologies such as electrification, internal combustion and chemical engineering, began circa 1870 and drove growth into the 1960s. The third, centered around information technology, defines our current era.

We could add information technology and renewable energy.

The budget deficit ballooned in 2009 because of the recession caused by the global financial crisis. It knocked so many people out of work that tax revenues dropped to the lowest share of the economy in over sixty years. (The Bush tax cuts on the rich also reduced revenues.) As the nation slowly emerges from recession, more people are employed — generating more tax revenues, and requiring less spending on safety nets and stimulus. So the key is to get the economy growing.

One problem for the US is even though the economy is growing is that many Americans are not getting ahead no matter how hard they work, and there is an increasing concentration of income and wealth at the top.

| Posted by Gary Sauer-Thompson at 10:27 AM | | Comments (6)
Comments

Comments

The Republican party is deeply split. 84 Republicans joined John Boehner in voting for the Senate's compromise bill to avoid the fiscal cliff, while 150 Republicans lined up behind Eric Cantor in the no camp.

The House Republicans are stifled by a Democratic Senate and president. Many of them hail from safe, conservative districts and areTea Party-backed Republicans and they are mostly from the more conservative south.

They will use the forthcoming trumped up fight over raising the debt ceiling and spending cuts as leverage to push their ideological case for slashing welfare and protecting defence. They are opposed to the redistributive effects of American social spending and this will exacerbating the economic hardship of low-income Americans.

China's ability to manufacture has put the kybosh on the US too..
Never mind really I think as long as we and others arent drawn into their despair.
The world would be a better place i would argue if they had less to do with it.

Republicans are quite looking forward to the chance to once again threaten to bring about the collapse of the American economy unless they can squeeze some more cuts from the budget. When the debt ceiling comes up in a couple of months the Republicans will have no reason to give an inch.

The large tax increase, including on the wealthy, which the Republicans really didn't want that to happen, are behind them.

"They will use the forthcoming trumped up fight over raising the debt ceiling and spending cuts as leverage to push their ideological case for slashing welfare and protecting defence. "

They come from safe conservative districts and see themselves as brave mavericks, bucking the party establishment to promote their ideological agenda. Hence they will oppose Barack Obama's Kenyan socialist tax hikes, or Barack Obama's Kenyan socialist debt.

They don't care if the Republican party looks terrible in the eyes of the public.They will look good in their conservative districts and this will ensure their re-election. They have little incentive to compromise on bipartisan deals to address the country’s fiscal challenges,

Conservative ideology in the US has evolved steadily over the last few decades from a loose set of habits and prejudices to a tight system of specificity, rigidity, and self-validation.

This dogma involves the beliefs that cutting federal assistance to poor people helps them, or that it’s just a fact lower marginal tax rates on the wealthy happen to perfectly coincide with better lives for everybody.

The conservative House Republicans not going to abandon their dogma, or even modify it due to mere trifles like a national economic crisis, or a minor a fiscal conflict. These are seen as opportunities.