Is “Starve the Beast” Finally Working? At (Almost) the Worst Possible Time?
Even as some vaguely sane voices on the right — notably former Reagan budget officials — are acknowledging that the thirty-year experiment in “starve the beast” has failed…it seems to be working.
The austerity principle is finally taking hold — just when the opposite should be true.
The basics of fiscal and monetary policy aren’t really rocket science: you loosen, spend, and cut taxes in the bad times to stimulate the economy, and tighten up when the economy’s going strong.
But now — thanks as usual to the deranged “theorists” on the right (they don’t care much for facts and empirics) — the whole world seems to be doing the opposite (with misguided encouragement from the IMF).
After three decades of almost nonstop Keynesian stimulus, in good times and bad — by the very people who supposedly abhor said stimulus — it’s up to the Democrats, once again (viz: Clinton), to clean up the mess that Red-Ink Republicans have left us with.
Obama’s got us on track to flatten the curve. Can he reverse those thirty years and pull it back down?
He has not succeeded in his first year and a half in office. Obviously a failed presidency.
Related posts:
A lot of people (myself included) would be more open to a stimulus if there was a credible long term plan to bring the deficit under control. Right now, there is little reason to believe congress will provide one.
Incidentally, during the surplus years it was a Democratic president and Republican congress.