That’s nice on-the-ground reporting. Unfortunately, the piece falls down when it turns to a Washington talking head:
Other GOP leaders criticized what they called the Obama Administration’s “big-spending policies,” saying they are pushing the national debt on to the next generation. Republican National Committee spokesman Ryan Tronovitch pointed Monday to the $862 billion federal stimulus package passed last year as part of the problem.
Tronovitch said “Kentucky’s economy is far worse off” since the stimulus package was passed.
Too bad the AP didn’t ask a follow-up question, like, “How is Kentucky’s economy worse off?”
The New York Times offers what could be seen as the counterfactual story, and what could have happened—and, perhaps, still could— without economic stimulus.
The subject is Ireland, where an economic crisis two years ago led to cuts in public spending and increased taxes. But those austerity measures haven’t turned out that well:
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.
Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed — those out of work for a year or more — have more than doubled, to 5.3 percent.
Now, the Irish are being warned of more pain to come.
It’s not pretty—as an accompanying slideshow makes clear.
Of course, the U.S. isn’t Ireland. But it’s important story to consider, as Congress acts, or fails to act.
From this article, one might get the impression that there is consensus on the part of economists concerning the best strategy to mitigate this recession / depression. Honestly, if this is supposed to pass as reporting, no wonder more and more people are seeing no value in it.
#1 Posted by Louise, CJR on Wed 30 Jun 2010 at 09:30 PM
There's a consensus that we are in a globally depressed economy, there is a political consensus that we should ignore it and focus on long term debt issues through entitlement cutbacks and regressive tax increases, and there is a consensus among "saltwater economists", ones that weren't in Milt Freidman's Chicago Laputa inflating dogs' behinds with "Rational Market" bellows, that the banks need a strong regulatory structure and that the government needs to become a major purchaser, for the time being, in order to prevent further economic erosion.
There are plenty of real world examples which demonstrate that austerity, in a time of private sector retreat, produces none of the intended gains since the contracting economy reduces revenues beyond any spending cuts and the increases on service load (from unemployed, etc..) eat any savings intended through service cuts.
The people who don't see this also don't see the value in the materials pointing it out. They also seem to lack any good ideas on how to solve he problem themselves.
#2 Posted by Thimbles, CJR on Thu 1 Jul 2010 at 12:38 AM