Is Starvation the Cure for Hunger?

This is a poignant line from L. Randal Wray in an article today from Demand Side Economics. He reports he’s just come back from conferences in Berlin and Helsinki and has interesting things to say. Both conferences raised some hope for the European economy, but one senses Wray is not buying much of it.

The typical path European countries have followed in recent times of economic crisis has been a path of austerity. They have worked at making budget cuts and reducing their debt as their economies languish. It hasn’t worked any better there than the pundits in this country who push these same failed policies. Again, as Wray says, “Yep, the patient is weakening, so we’ve got to drain more blood to restore health.

Wray lifts up the story of Ireland which is now involved in its 6^th austerity plan. It reminds me of the decision to export potatoes during the potato famine years ago.

We should not feel smug as both parties here seem to embrace the same absurd policies including leadership by President Obama’s willingness to reduce “entitlements” to revive the economy. All that does is oppress the poor all the more and make more people get lower paying jobs when they lose higher paying jobs. All in the name of keeping taxes low for the ultra rich.

Obama does say we should bring down the debt responsibly which is a fine idea, but you have to get the economy going before you reduce the debt. It not as though we do not have precedents, precedents that worked; the New Deal and the Great Society, but we seem to have no history memory in this country. What we are doing is reducing government spending which then is matched by reduced private sector spending by the same or and increased amount.

We should know by now the deregulation got us into this mess so it should be obvious the increased regulation should help us out of this mess and that means more government spending and a larger government. That is a win win scenario that is ignored.

The U.S. should be leading the way to economic recovery rather than following the failed policies in Europe. Folk say we don’t want to saddle our children with debt we create; we have said that every generation and still spend. And while it seems sounds good it doesn’t work in our current situation. If we follow our current policies of smaller government, less regulation and low taxes for the rich the majority our children will working at minimum wage jobs (if it still exists) rather than good paying middle class jobs. They will be the peasants providing wealth for their feudal lords.

Forget the debt, create jobs! Starvation is not the cure for hunger.