When leeches don’t work

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Does the patient have anemia? When leeches don’t work, the solution is to add more leeches. And if those don’t work, you know what to do.

So says British Treasurer George Osborne, who insists that Britain’s recession (caused by austerity) makes it vital that average Britons suffer more austerity. Osborne says that political opponents to austerity are “irresponsible.”

Maybe average Britons don’t know about the “medicine wagon” hucksters that we used to have here in the American West…

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Osborne says that slowed growth in China, plus the recession in Brazil, plus instability in the Middle East and the plunging cost of crude oil are potentially hazardous to Britain. Therefore average Britons must have more austerity

Christine Berry of New Economics Foundation (NEF) disagrees, saying that the real risk to Britain’s economy is the catastrophic surge in household debt, caused by austerity.

(When the government drains money from the economy, it forces average people to seek loans, which is one of the central purposes of austerity. It is not enough that the peasants are impoverished. They must be reduced to debt-slaves.)

Osborne says that Britain’s economy has performed “better than almost anyone dared to hope.” Actually he is correct when referring to the financial economy. However the real economy (the one based on consumers buying and selling gods and services) remains in a depression caused by Osborne’s austerity.

Osborne warned that Britain’s economic recovery (i.e. its soaring financial markets) could be derailed unless the government applies more austerity (on the real economy).

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Change of topic…

The Wall Street Journal (owned by billionaire Rupert Murdoch) is increasingly charging subscription fees if you want to read the same lies that other web sites spew out for free.

Perhaps all that austerity preached by the right-wing Journal has reduced advertising revenue. Or perhaps the editors are simply arrogant and greedy. Whatever. Only idiots read the Journal anyway.

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Here’s an article in the WJ Journal which claims that the era of austerity is over.

Congress brought the curtain down on five years of austerity when it passed a budget deal last month. By loosening spending caps and extending various tax breaks, the agreement means that combined federal, state and local spending and taxes will contribute to growth this year for the first time since 2010. 

Lies. Austerity will continue to worsen until we see a dramatic increase in the federal deficit. By the way, how is it that taxes “contribute to growth”?

The end of austerity isn’t, however, cause for celebration. Rather, it simply underlines how the budget’s role as a counter-cyclical economic shock absorber has fallen victim to ideological differences over the size of government.

Ah yes, the call for “small government.” What does that mean anyway? Let’s get a proper definition…

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This year will be the mirror image of 2011. With the spending caps loosened and several tax cuts becoming permanent, fiscal policy has now turned stimulative.

I’ll believe that when the federal deficit starts to grow…if ever.

krugman

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