While Republicans Warn Against ‘Greece,’ That Is Exactly Where Austerity Budgeting Will Lead U.S.
European Austerity Isn’t Working
Enacting the same fiscal policies in this country would, presumably, induce the same effects. Yet despite their enthusiasm for extreme austerity, the Republican, tea party and assorted media soothsayers almost never want to discuss what has happened in Europe as a result of those same policies. It is not always possible to ignore the unhappy reality of renewed recession, from England to Italy.
Just last weekend, the British were jolted by news that Moody’s had downgraded investments in their country’s sovereign debt from its traditional AAA status.
Why would the bond-rating agency do something like that? Principally because the miserable budgeting of Tory Prime Minister David Cameron’s government has mired the United Kingdom in negative growth, with no prospect of reducing its debt, which keeps growing. So the scheme that was supposed to improve the fiscal outlook for the British has merely lowered their credit rating. That wasn’t supposed to happen—in fact, the austerity plan was designed to preserve Britain’s AAA rating—but it was inevitable as soon as Downing Street chose budget-balancing over growth.
The same downward trajectory can be marked wherever the leaders of dominant Germany have forced austerity plans onto indebted governments.
So damaging has this process become for all of Europe that the Germans finally began suffering the ironic consequences in the last quarter of 2012. Their export-led growth strategies cannot work when their neighbors, reduced to poverty, can no longer purchase German goods. If German exports pick up again this year, it will only happen because customers in the U.S. and China remain exempt from the effects of austerity.
Until now, the United States has escaped the fate of Europe, remaining the “sole bright spot” of steady growth in the global economy because President Obama resisted the fiscal extremism of his Republican adversaries and contrived to ward off recession with necessary spending. Now sequestration, with all of its dire social and economic effects, will provide a taste of what is to come under Republican austerity: a shrunken nation with a dim future.
© 2013 Creators.com (Thanks to expressmilwaukee.com for this article)