Mashed Potato Bulletin

A journal grappling with the mish-mash of American politics

Brian Carter

Brian Carter
Location
Northern, California, USA
Birthday
October 23
Bio
My professional and academic background is fairly broad including a Bachelor's in Cultural Anthropology, a Master's in Environmental Science along with a hefty injection of world history in the mix. Professionally, my experience is in public health and environmental health where I have been lucky enough to work with people from varied backgrounds and cultures. I started the Mashed Potato Bulletin to explore answers to questions not being asked and to insert, hopefully, a broader perspective into the current conversation. ----------------------------------- http://mashedpotatobulletin.com/

Editor’s Pick
MAY 7, 2012 4:56PM

French Reject Austerity; Are US Republicans Listening?

Rate: 4 Flag

     This past weekend French voters denied their incumbent president Nicolas Sarkozy reelection in a resounding rejection of austerity policies which have kept European economic recovery out of reach. In arrant disavowal of this message and mounting real world evidence to the contrary, Republicans in the U.S. continue their own pursuit of spending cuts policy.  

     Sacrifice and spend is the basis of the GOP strategy. Its most recent incarnation of this budget approach is embodied within the Ryan Budget which does reduce the deficit but sacrifices funding for numerous social and health programs while extending generous tax cuts and increases defense spending. As of this morning, the House of Representatives approved a bill which retains defense spending levels while cutting $18 billion from Medicaid and the President's housing assistance program for struggling homeowner's this year and $250 billion over the next decade. It also cuts funding from a regulatory agency that oversees controlled collapses of failing financial firms in an effort to avoid what was witnessed during the Great Recession.

     While the concerns are warranted and efforts by the conservatives in Washington to reduce national debt is understandable, as the world has seen in Europe the timing is inappropriate. Debt reduction is a long-term goal while creating the conditions for recovery from a deep economic crisis involves short-term policies. The two are incompatible with one another. Given this, there are balanced approaches which can be implemented over time while maintaining the resources needed for recovery in the short-term. Two similar plans have originated in congressional committees over the past 3 years. All included sustainable spending cuts and responsible tax increases. However, each of the plans were thwarted by the No Tax pledge signed by the vast majority of congressional Republicans.

      In principle, the newly elected French President, Francois Hollande, has declared his wish to take a similar balanced debt reduction, growth fostering strategy as those proposed in the US. Spending in the short-term needs to be targeted and geared towards investment. The retraction in this aspect is a significant reason why the continent sits in constant fear of a second downturn and why countries like Spain are experiencing a double-dip recession. The US's stimulus stemmed the tide of job losses and the investment it was able to make helped create conditions for the private sector to begin hiring again. As was evident from the May 2012 job report April was the 26th straight month for private sector growth. As stimulus funding faded and budget cuts took effect the primary source of job loss was in the public sector, in government jobs. These losses negated many of the gains made in other sectors and illustrates how austerity diminishes the overall recovery.     

     For the Republican Party the question avails itself, will European public outcry and real world evidence running counter to their austerity policies result in a predictable dismissal of the outcomes as testament to the detriments of socialism? Or, with their own particularly low public approvals will they consider this a portent of things to come and acknowledge the need to break from party line principles to find a way to listen without pretense?

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I never tire of repeating my belief that the simple concept of checkbook arithmetic is capable of defeating the most ardent Socialist/Progressive.
Let's see how the French plan on paying for all that crap...

...then we'll decide if this was a good move.
UncleChri,

http://www.rooseveltinstitute.org/new-roosevelt/federal-budget-not-household-budget-here-s-why
Spence,

Thanks, I did read the article associated with you link. It's not convincing.

A little of your own thought should persuade you that the only difference between our national budget and what happens when you try to balance your checkbook is that you don't have the priviledge of printing the money with which you repay your creditors.

On the national stage this simply delays, and cheapens (through inflation), the repayment of our obligations. They, nonetheless, must be repaid. Failing to repay them will allow others to conclude that we are insolvent; and that will be the end of America as we know it.

It's really simple. Please don't let the Roosevelt Institute do your thinking for you on this subject. Its hero had a significant impact on the process that has led us to the mess in which we find ourselves today.

And, just in case you still don't get it, let me summarize my side of this argument in just three, . .. . err. . . five. . .. err. . . . . seven . . . ahhhhhhhhhh. . . . whatever number of words:

USSR
Cuba
Greece
Italy
Portugal
Spain
Ireland
Well stated parallel of what may well portend for us. The main difference is one of balancing the budget on the backs of the Middle class, here in the US, while with France, it is much more complicated: you are not about to deprive the French their life style, replete with all of its social services -- on top of asking them to assist the entitle - fed of Greece, Italy and Portugal ... This is a huge difference. We have to find the strength to cut with the skill of
a gifted surgeon. If we allow the TPer's who have about as much skill as a veteran union butcher, then we are really in for it. People are getting it. The question is how long will we manage the inequity of Defense, Big Pharma and Insurance behemoths to be put in check. The Congress has put the brakes on to such a degree that it is no wonder that we are being challenged as a viable refuge for the world equity markets. It will be a challenge to the many. Not the few who can weather tough times.
Not sure where your going with this. Can I assume that you believe Greece, Italy, and Spain should just let interest rates rise and send their debt load off a cliff.(there comes a point where loans are no longer available to those who default)
Spending adjustments needed to occur. /! /
Odd that they did not see reduced public spending would have adverse effects on the economy. Adding tax increases at the same time just multiplied the negative effects.
Since tax policy has 3x the stimulative effect over spending policy, they should have counterbalanced the public sector spending cuts with private sector tax cuts.
If every billion in spending cuts were countered by 333 million in tax cuts, the negative effects on the economy would have been eliminated.
When government steps out of the economy, someone has to step in to take its place.
It just seems someone, somewhere, should have known that two negatives don't make a positive.
Even Keynesian economists should have seen this coming.
Nothing says rebuilding an economy like spending more money.

Nobody looks to France for much of anything. They have had one of the worst unemployment rates in Europe for a decade, it's illegal to work more than 35 hours per week, and they're more worried about English words creeping into their has-been society than in dealing with their minority Muslim populations that regularly "protest" the racist French society by burning cars and destroying things.

I lived there for a while and their society is clearly schizo.

In 2010 over 1,000 cars were burned in riots. And in 2003 over 5,000 people died from not having air conditioning.

I pretty much don't look at France for how to do anything.
UncleChri: I say the same thing. And Obama never even balanced his own checkbook before becoming president of the U.S. Michelle did it. SO: France has run out of other people's money and austerity will either be chosen or forced upon them. We all have to live within a budget or under a bridge: the choice is ours [and theirs]. The U.S. has a 15 trillion deficit, 4 trillion spent by Obama. We have the choice to make now. I don't have the luxury of saying: I don't feel like living within my means and neither does France or Greece or the U.S.
I never tire of repeating my belief that the simple concept of checkbook arithmetic is capable of defeating the most ardent Socialist/Progressive.

It's very hard not to laugh at this one. Before writing such statement, you also need to understand simple arithmetic, which you clearly don’t (which is also at par at your understanding of socialism). You need to stop projecting your own ignorance onto others.
Kanuk - my guess is that UC understands simple math pretty well. I know I do, So instead of simply just asserting the statement is laughable, why not explain it to us.
If UC knows simple math, surely he should have been able to explain why the costs didn’t go up when elements of socialism were introduced in 1971?

Ballooning health care cost: is Medicare the culprit?

Can you?

Balancing checkbooks seem to be easy. You just need to cut the budget of federal programs (combined with no increase in taxes). If Paul Ryan doesn’t understand checkbook arithmetic, are we expecting UC to understand it as well?

Ripping apart Ryan’s budget Plan 1000 deaths at the time…

Speaking of math, perhaps you would like to comment here:

The case against the U.S. health care system
So sorry to see the level of paleoconservative comments you have attracted here. It's an old, old, story. Of course what's going on in Europe, and France, is different than here. But the analogues are intriguing. Would a Ryan budget, if enacted as proposed, bring down a Republican majority in the House, chip away at their numbers in the Senate, and ultimately bring down a Republican administration? Yes. The American flash point most similar to the European anti-austerity militance is Social Security. Ryan's approach to social security would mobilize the 40 to 55 crowd against the Republicans in and of itself. And seniors would feel threatened even if their own benefits were not cut (in the first round at least). And the punitive cuts in Medicaid and unemployment benefits, to name just two, would drive a wedge between the broke Tea Partiers and their more affluent conservative chums.
Voters don't like it when they're told they can't have something. Whomever tells them that gets voted out of office.

It's that simple.

When the party they vote into office can't fix everything by spending borrowed money they get voted out of office. The process repeats itself until the bottom falls out and the IMF steps in.

Quite simple, really.
Steve> That's about how I'd envision the situation evolving as well with the implementation of the Ryan Budget. I find the Medicare change argument interesting. Ryan says that it won't change for any of the current Seniors, so why should they be against it? But that reasoning in of itself assumes those Seniors don't have any concerns for how the program will function for their children or their childrens' children. It assumes a selfishness in today's Seniors that I think is quite ridiculous and insulting to them.