[tdg]

A lot of Keynesian economists are arguing that now is not the time for austerity. The government's current mission should be to lower employment even if it means higher deficits (and debt) _for now_. Once we are out of this slump, the argument is that most of the deficit will take care of itself (since some of the deficit is lower tax revenue because of unemployment + cost of automatic stabilizers such as unemployment benefits). We still need to fix the rest of the deficit/debt problem after the crisis, though.

The second important argument is that (again, right now), this emphasis on austerity is actively making things worse.

[crusso]

government's current mission should be to lower employment

Well since we've exploded our debt to supposedly lower unemployment and the meter has barely moved, maybe we're doing it wrong? We've indulged the Keynesians quite enough over the last $6+ TRILLION dollars, tyvm.

I see people in this thread demanding evidence that more debt is bad for the country. Well where the hell is the evidence that shows that staggering debt is good for the country?

Maybe we should fall back on common sense "household" or "business" models until that evidence appears, huh?

this emphasis on austerity is actively making things worse.

What austerity? I've heard some talking about it, but we're not practicing it anywhere. Don't you dare use the word "sequester", because that was a joke.

[scott_s]

The sequester is not a joke. A friend of mine knows postdocs whose NIH funded projects were cut 20%, immediately, when the sequester went into effect. Another friend of mine will be in next class to start with the FBI, but they've been put off until 2014. To be clear, the FBI is not training new agents right now.

The sequester is real, but it may take more time for the effects to reverberate throughout the country.

[crusso]

The sequestration has only been painful because the Administration wants to make an example of any efforts to reduce the size of the government. Funny how NIH projects could have a 20% cut when the $44 Billion reduction this year as a result of sequestration is 1% of the actual budget. Where did that other 19% come from? Further, the sequestration only reduced the increase on the baseline budget. We're still going to be spending more this year than we did last year.

http://www.realclearpolitics.com/articles/2013/02/27/sequest...

[scott_s]

Funny how NIH projects could have a 20% cut when the $44 Billion reduction this year as a result of sequestration is 1% of the actual budget. Where did that other 19% come from?

That is a complete non-sequitur. The amount a grant from one federal entity is reduced is not limited to the same percentage as the total federal budget.

[etherael]

Totally true, if as a politician you want to manipulate your power base into believing that a small reduction in your power is a really bad move, you should make every possible administrative move to maximise the direct pain they will feel from that reduction.

Keep the fat and cut the muscle makes great sense when you are commanded to drop 1.5% of mass and you want to make the case you're going to lose a ton of strength.

That really doesn't help your case.

[TheCowboy]

The idea that this pain is a joke is pretty unfounded. It is based upon the idea that there is waste and waste and waste everywhere. If that is the case, then it should be pretty easy to target such wasteful spending, but that isn't exactly the case at all.

Also, these cuts aren't even close to what are desired by a certain segment of law makers. If that desired austerity were to be put in place, and you think agencies at trying to make an examples now, their current examples would pale in comparison to what we would see.

If it is so easy to say an agency doesn't need to cut X when they can cut Y, then pass a bill cutting Y.

[crusso]

It is based upon the idea that there is waste and waste and waste everywhere

I don't know how educated people concerned about politics and the economic health of this country could not read these kinds of stories that come over the wire and know that there's an extraordinary amount of waste in the Federal government that could easily be cut.

http://articles.sun-sentinel.com/2011-02-19/news/fl-federal-...

Unfortunately, so many voters have their heads in the sand and don't know what's going on - or worse yet, they're doing like you are here and propagating misinformation.

[simonh]

If only there had been a few Republican presidents in power some time in the last couple of decades to do something about all this waste.

[encoderer]

Right. We blow a crater in our economy, and begin to listen to Keynes when he says that government dirt should be shoveled in as a land-filler of last resort. We shovel-in a fraction of what was lost and then freak out when the hole is not refilled and ready for pavement.

First, most of the debt racked up was not even remotely related to stimulus. So it's not like we have $6tn in stimulus. But mostly, even if it was, the hole we blew in our economy was much larger than even that $6tn.

[dragonwriter]

> Well since we've exploded our debt to supposedly lower unemployment and the meter has barely moved, maybe we're doing it wrong?

Many, if not most, Keynesians agree with this -- that the current US policy has been all wrong, even while it some elements were correct in very broad outline. And they were saying that when the policies were proposed, not just when they failed to work.

> We've indulged the Keynesians quite enough over the last $6+ TRILLION dollars, tyvm.

No, what we've done is adopted incoherent policies that are driven by some impulse toward Keynesian with some directly contrary impulses (in part, this is a consequence of different branches of government having different preferences.)

[Hario]

What Keynesian 6 trillion dollars are you talking about?

[argonaut]

You speak of a "meter [that] has barely moved," yet the economic consensus is that were it not for the stimulus, unemployment would be even worse than it is now.

[crusso]

Well since it's mostly the people who spent the money as well as the people who advised us to spend the money who are telling us this - are you surprised? When the press tends to not ask the masterminds of that spending uncomfortable questions, then why should we be confident in our knowledge based upon what they have told us so far?

Shouldn't we be instead be giving more credence to those who said that the stimulus wouldn't accomplish what the Administration was selling? Since those contrarians were right?

You say that it would have been "worse", but how much worse? The justification for adding such a huge amount to our debt was the big return. If the stimulus got us to 7.7% unemployment right now, but without it we'd be at 7.9%... then maybe we should have not incurred so much more debt?