Austerity Measures Will Only Worsen Current Recession

By Eileen Appelbaum, AlterNet
Posted on June 6, 2011, Printed on June 8, 2011

The administration and Congress made a terrible mistake switching their attention from jobs to deficit reduction -- and the country is already suffering the consequences. GDP growth fell from 3.1 percent in the last quarter of 2010 to just 1.8 percent in the first quarter of this year. Consumer spending has slowed. The pace of business investment has weakened. Factory orders are down. In fact, the Institute for Supply Management’s May manufacturing figure fell to 53.5 from 60.4, the largest one-month decline since January 1984. Housing still hasn’t recovered from the bursting of the bubble and remains a disaster zone.

Friday’s job report for May -- showing an increase in the official unemployment rate to 9.1 percent from 8.8 percent in March -- should give the "Austerity Now!" crowd pause. Amid the assault on government spending, public sector employment fell by 29,000 in May, mostly at the local level. Local government jobs are down nearly half a million since they peaked in September 2008. Expect this to worsen in July, when the new budget year starts in most states. Teachers are getting pink slips.