Serious Stuff: The Austerity Illusion

The Austerity Illusion

July 21, 2012 by Izzy Moskovitz

Quite frankly, most of the discussion that I’ve heard about the issue of proposed and enacted economic austerity measures has absolutely bored me to tears. I think that I’d probably rather have a tooth pulled than have to listen to another word on the topic. Well, maybe that’s a bit of an exaggeration, but you get the sentiment, I’m sure.

This is yet another one of those issues where politicians throw up a thick smokescreen of misleading statistics, loaded statements, demagoguery, and steaming bull manure. They want you to think that all of this is extremely complex, that their views are supported by expert opinion, and that you’d better get on the austerity wagon pronto or the whole country will go to hell in a hand basket.

But I’ve got news for those politicians. The country went to hell in a hand basket a long time ago. Guess who sent it there? That’s right -- the same political leaders who are screaming for austerity measures.

I’m as opposed to oversimplification as anyone else, but the whole issue of economic austerity is really quite simple. Here’s what happened, and here’s what the proponents of austerity want to happen:

The neo-conservatives, and not a few neo-progressives, bent over backwards to strip our financial sector of necessary government oversight. To a significant extent, this process got started during the Reagan administration, and then picked up considerable steam during the Clinton administration with the cancellation of the Glass-Steagall Act, and finally went into hyper-drive during the Cheney dictatorial regime.

For a while, they got their money for nothing and their chicks for free, especially around early 2007, when the stock market hit the stratosphere, housing prices hit the exosphere, and millions of gullible dupes, thinking that there was nothing to fear, were led to believe that the party could go on forever and that there would never be a hangover. Our formerly staid financial institutions were transformed into high-stakes gambling casinos. In the meantime, we were embroiled in Afghanistan and Iraq, spending zillions of dollars and spilling oceans of blood. It was like we had assembled a toxic collection of bad financial practices and unnecessary military involvement, and in the process had created a sort of whopping Jägerbomb of depravity and misery. It was as if we had set up our economy to work just like it did immediately prior to the Great Depression, and had gotten our army to engage in two Vietnams at once. They say that insanity is repeating the same mistakes. According to that definition, our government is completely insane.

When the funky fudge finally hit the economic fan, the architects of disaster, the same ones who got us into the whole mess, proclaimed that excessive government spending on domestic initiatives was the problem, along with too much government regulation of corporate activity. That’s like squandering the family fortune by gambling on horse racing, and then blaming your economic ruin on the pitiful salary that you paid the maid. That’s like saying that it’s someone else’s fault that the dog crapped on the rug because they tried to stop him from doing it. That’s like being a lying, soulless, conniving, flea-infested, ground-burrowing weasel. I mean it. Really.

Step one in attempting to recover from the economic fallout was to pass a massive stimulus package that was focused primarily upon shoring up the same “too big to fail” financial institutions that had been allowed by our complacent and excessively permissive government to wreak havoc both domestically and internationally. Unsurprisingly, this particular measure had broad bipartisan support in Congress. The Bush administration initially proposed it, and the Obama administration put it into effect. If McCain had won, the same thing would have happened. The stimulus package sure did stimulate the packages of those billionaire bankers with the shiny gold parachutes, if you get my drift. Meanwhile, millions and millions of us got laid off our jobs, applied for unemployment benefits, had our homes foreclosed upon, and were told by the government, tough luck, maybe you were earning forty grand back in the good old days, but now you’ll have to make do flipping burgers. Welcome to our brave new world.

So, how to get out of our current mess? But you see, according to the proponents of austerity, you are asking the wrong question. According to them, the correct questions are the following. How do we take advantage of the current situation and thus further our political agenda? How do we insure that taxes remain rock-bottom for big corporations, that is, our chief campaign contributors? How do we manage to convince everyday folks to vote against their own best interests for the sake of the nation’s economic elites? The answer to all of those questions? We propose austerity measures.

The ostensible premise behind the idea of austerity measures is that we must all live within our means. That seems simple and reasonable enough. The government has a massive debt, so, the argument goes, let’s pay it off, or at any rate, let’s not make it any worse than it already is. As a matter of principle, we can all pretty much agree on that. But as always, the devil is in the details.

Let’s take a good look at America these days, people. We’ve got a crumbling infrastructure. We need new roads, new bridges, new dams, etc., throughout the country. We need to remake our electrical power grid system. We need to insure access to affordable broadband Internet for everyone. We need to develop a nationwide high-speed rail system. We need a lot more funds for our schools, whether K-12 or college. All of this would create millions of jobs, would move the nation forward for decades to come, and would open up all kinds of possibilities for future development. And all of this requires government-based investment, because the private sector isn’t going to pick up the tab for hardly any of it.

But wait, cry out the proponents of austerity measures. Look here, they point out, we can’t pay for any of that stuff right now. Look at the sorry shape we’re in. No, no, they remark, shaking their heads, now is not the time for more government spending. Now is the time for cutting back on everything, especially on taxes for big corporations, because they employ people, and that wealth trickles on down, just like our hero and patron saint Ronald Reagan used to say. First, let the economy get back on its feet, pay off the national debt, and then we’ll think about maybe financing a tiny bit of road construction somewhere, maybe in about two hundred years.

Let’s be honest here. That’s a recipe for turning the United States into a second-world nation. That’s a prescription for weakening the country. That’s a surefire way to guarantee that other countries end up saying: “Wow, the United States really used to be something, but look at it now, what a shame. The place is a total hellhole now.” In short, if you want the United States to turn into a rotten, corroding shell of what it used to be, that’s how you do it.

Actually, now is the best time ever to make an investment in America. We are in dire need of a total overhaul and can’t afford to put it off any longer. Will such an investment increase the national debt? In the short term it probably will, but we should keep in mind the rather unpalatable consequences of taking no action at all. Evidently, something must be done.

As we’ve said over and over again here at Somebody’s Webpage, the key measure to reducing unnecessary government expenditures is to put an end to our military misadventures in the Middle East and to drastically scale back our overall spending on our armed forces, both domestically and abroad. Those steps will do wonders for balancing our budget. Also, let’s ratchet up the tax rates on the wealthiest Americans. That will also help a whole heck of a lot to reduce our budget deficit.

This is not a matter of deciding between capitalism and socialism, between market freedom and government interference, but rather between petty, small-minded elitism and thoughtful, broadminded populism. Austerity is the snake eating its own tail, because the more we cut back on useful government spending, the worse our economic situation, and the worse our economic situation, the less tax revenue will be collected, which will lead to calls for additional austerity measures. So, the end game for the austerity plan is economic ruin.

This nation was not built upon private investment, but rather upon a common vision for a shared prosperity. That vision has implied necessary government investment in things that would benefit all, such as the interstate highway system that was put into effect during the rather conservative Eisenhower administration. When the public sector invests in the right projects, the private sector is the beneficiary. And when the private sector thrives, the public sector increases its tax revenues, which it can then reinvest into more beneficial projects.

But the proponents of the austerity illusion want you to think that the private and public sectors are mutually antagonistic, and that government can’t do anything right, etc. We seem to forget that we are the people, in other words, we are our government and our government is us. We’ve elected our representatives. So, let’s now hold them accountable for their actions.

There is one particular area, however, where I think that austerity measures should be enacted with great rigor, and that is with regard to the salaries of our elected officials. But don’t hold your breath on that one, folks.