Tuesday, April 24, 2012

Is Europe wising up?

In the wake of the first round of French elections, people are beginning to pay more attention to the growing number of voices in Europe suggesting that German led "austerity for all" is not working. Europe as a whole has a 10.8% unemployment rate, and unemployment in countries like Greece and Spain are depression level. Italy and now France have joined the rolls of countries which must pay more interest on their sovereign debt.

Mario Monti, Christine LeGarde, and a great many European economists have been calling for pro-growth policies to offset the negative spiral created by austerity. Countries cannot balance their budgets when tax revenues are falling, and tax revenues won't increase until individuals and businesses are earning more. Businesses cannot grow without markets for their products, so even export driven Germany is in a slowdown.

Here in the United States, Republicans want us to do just what didn't work for Europe, but with one important difference: while European austerity programs include tax increases, Republicans want to cut taxes even more than they already have, with special emphasis on taxes for wealthy individuals and corporations. They maintain that such cuts will encourage the richest of the rich to invest more, thereby creating jobs, and expanding the economy. Yes, it's good old "trickle down" again.

American corporations are sitting on mountains of cash but not using it for job creation or business expansion — primarily because there is no demand for their products. The super-rich, who also have mountains of cash at their disposal, are back to gambling on derivatives, not entrepreneurship (unless you count financing superPACs as entrepreneurial activity.)

So how do the Republicans mean to balance the budget? By taking the food out of the mouths of hungry children, reducing senior health care benefits, and generally screwing everybody who depends in any way on government safety nets. There's a word for that.


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