A month ago the Milwaukee Journal Sentinel ran a column by Sheldon Lubar arguing:" The Age of Austerity is also what lies ahead for all of us today, not our grandchildren. This is the painful reality."
Putting aside the fact that tens of millions of working and middle class Americans, including the fifteen million who are unemployed and fifty million without health care insurance, have already been subject to the austerity of declining real wages, stagnate family incomes and soaring medical, education and real estate prices (until recently), Lubar is prescribing exactly the wrong medicine for what ails the U.S. economy.
Nobel Prize winning economist Paul Krugman repudiates Lubar and the austerity crowd:
For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.
This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.
Krugman concludes:... the next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you’ll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we’re bad and the confidence fairy will reward us if we’re good. And real-world policy — policy that will blight the lives of millions of working families — is being built on that foundation.
Krugman's column is worth reading and is linked here.
The Milwaukee Journal editorial Board also weighs in today with an editorial that explains why focusing on deficit reduction is not only wrong, but likely to undermine the recovery and revive the worst recession since the Great Depression.