Austerity Comes to America

Wednesday, 22 May 2013 09:35
By Gerald Friedman, Center for Popular Economics | News Analysis

Economists at the University of Massachusetts and elsewhere have thoroughly discredited research suggesting that cutting government spending will promote economic growth during a time of recession.  Even while scholarship has exposed the fallacy of austerity economics and this news has reached wide audiences through Twitter and the Colbert Report, the United States government is embracing austerity’s policy prescriptions.  While employment has barely kept up with the growth of the labor force and the best measure of the unemployment rate (which accounts for those who have given up on looking for work or who work part time because they can’t find full time employment) remains stuck at 14%, the federal, state and local governments are slashing payrolls and reducing spending in order to meet arbitrary deficit targets. The ghost of bad austerity economics continues to haunt, and even to drive, the living.