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the austerity agenda

June 1, 2012

I’m not really a huge fan of Paul Krugman, but I think he brings up a fairly decent (albeit obvious) point in his most recent op-ed originally made by John Maynard Keynes 75 years ago: that by pumping money into the system during slumps, the government can stimulate aggregate demand and help put people back to work in times of economic decline, and their subsequent spending will further help speed recovery. And conversely, that ‘starving the beast’ (i.e. the government) will most likely do little besides prolong and/or exacerbate the slump of an already depressed economy.

The bottom line is that austerity measures, particularly in combination with lower taxes on the wealthy and fewer regulations for corporations, ultimately hurt the working class and poor, eroding years of hard won gains by the latter while strengthening the former’s capacity to accumulate more profit, as well as letting them off the hook for their greed and irresponsible behaviour. By “using deficit panic as an excuse to dismantle social programs,” then, capital and the oligarchical ruling class have essentially found a way to utilize austerity measures as a means of privatizing gains and socializing losses under the guise of, ironically, fiscal responsibility.

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