Our economy continues to be in a tremendous demand-side slump, and yet the teapartier/ conservative/ Republican/ heartless bastard side of the argument insists we cannot afford more stimulus or even to extend unemployment for the historically unprecedented number of long-term unemployed who simply cannot find jobs in a stagnant economy.
The results of such austerity are clear in places that have already tried it. Behold, teabggers, the future you envision for America:
Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.Reading further into the article, you can see that the Irish public's fears over reduced wages and double-digit unemployment have led to reduced consumer spending and increased consumer savings, shrinking demand--just like we're seeing here. Imposing austerity measures and suddenly panicking about short-term deficits strangled what life was left in Europe's most US-like economy. If we follow that path, we can expect the same results. We might cut short-term deficits, but we'll guarantee long-term economic death.
“When our public finance situation blew wide open, the dominant consideration was ensuring that there was international investor confidence in Ireland so we could continue to borrow,” said Alan Barrett, chief economist at the Economic and Social Research Institute of Ireland. “A lot of the argument was, ‘Let’s get this over with quickly.’ ”
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.