03.30.11

Firings will continue until unemployment improves

Posted in Permanent Fail at 11:18 am by George Smith

Title cribbed from Pine View Farm.

The austerians’ lunatics’ plan, if my reading comprehension is still good: (1) Public sector workers, like school teachers, fed workers, firemen, have to be downsized and the release of newly unemployed will force wages downward for everyone else so when that happen US business will hire more people for much less, and (2) contraction is the new expansion — no explanation necessary — because it’s self-evident.

From Krugman, as its predicted to not work in England, where austerity has only resulted in more misery and protest:

Why? Because the only way the economy can avoid taking a hit from government cuts is if private spending rises to fill the gap — and although you rarely hear the austerians admitting this, the only way that can happen is if people take on more debt. So we have the spectacle of a government that inveighs against the evils of debt pinning all its hopes on an assumption that over-indebted households will dig their hole even deeper.

All in all, it’s quite a spectacle. It would be funny, except that millions of people will suffer the cost of this folly.

So if done in the US, the idea would be to cut things like food stamps so the people on food stamps, who may still have room on their credit cards, go into more high interest debt to the likes of Jamie Dimon/Chase so as to continue eating and preserve the lighting at night.

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