Our Common Good

While austerity is all the rage among politicians on both sides of the Atlantic, the International Monetary Fund has found that deficit cuts of  1 percent of gross domestic product tend to raise unemployment by 0.3 percentage points. Markets have also tended to react accordingly. The Dow fell by fully 265 points, or 2.2 percent, on the day Obama signed the Boehner deal and twice that amount again—512 points; 4.3 percent—just two days later. Since the showdown began earlier this year, according to economist Simon Johnson, the stock market has lost about 20 percent of its value (roughly $10 trillion). Thus, the consequence of Tea Party anti-Keynesianism has been, in Johnson’s words, “to reduce publicly funded social benefits—including pensions and Medicare—even as its methods dramatically reduce the value of private wealth now and in the future.”

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….Keynesianism is not a perfect guide to economic reality, but it has proven a better one than any available alternatives, and certainly the Republicans’ discredited Depression-era mantras. Should not the job of the media, as Keynes said of “skilled investment,” be to “defeat the dark forces of time and ignorance which envelop our future”?

  1. vruz reblogged this from silas216 and added:
    The Nation —via
  2. silas216 reblogged this from sarahlee310
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  4. reflux reblogged this from sarahlee310 and added:
    Excellent read.
  5. sarahlee310 posted this