THE TRIUMPH OF AUSTERITY

Posted on: June 1st, 2012 by Stas

The dismal jobs data report showing that only 69,000 jobs were created in May and that unemployment rose proves that Republican led austerity measures in Congress  have failed to generate jobs.

Sadly, the Obama administration and Congressional Democrats were ineffective in fighting Republican cutbacks.

The failures to invest in infrastructure, energy-saving investments and jobs makes a bad situation worse.

The bad economic news may pave the way for the election of Mitt Romney, because the economic failure has occurred on President Obama’s watch.

The President still has time to study the example of the late Harry Truman who ran his 1948 presidential election against Congressional Republicans who opposed change and social investments.

The result was Truman’s upset victory over Dewey.

If President Obama has the courage to repudiate the ruinous austerity measures that he agreed to in 2011, then he might still change the course of a political campaign strategy intent in making him a one term president.

France, Greece and the rest of Europe are waking up to what happens when you cut spending in a Depression.

President Franklin Roosevelt made the same mistake when he cut back on New Deal spending in 1937. His programs were  creating jobs and new growth. By cutting back on spending, he  caused a change in direction that caused a second Depression in the United States.

The British economist John Maynard Keynes observed that anti-spending policies during the Depression of the 1930s had a ruinous economic effect, just as they do in Europe and the United States today.

Keynes warned about the adverse impacts of cutting spending in a downturn and argued that the answer is to increase spending because for government spending has a multiplier effect that creates additional consumption and growth.

An old saying goes that they who ignore the lessons of history will repeat history’s mistakes.

2012 may affirm this saying  in both Europe and the United States.

Rebuild the United States  has waged a campaign proposing the Jobs Bank as a means to invest $2,000 billion in loan guarantees so as to finance energy-saving investments and  as many as 20 million  jobs.

Is it time we tried creating jobs rather than  getting rid of them?

 

 

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