Worried about the 'Fiscal Cliff'? Oh, then you are a Keynesian.

[Bill USA]

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/29/worried-about-the-fiscal-cliff-then-youre-a-keynesian/

The reason the fiscal cliff is such a threat to 2013′s economy isn’t that it’s too little deficit reduction — it’s that it’s too much all at once, totaling about $720 billion, or 5.1 percent of GDP in a single year, which could throw the economy into recession.

Republicans agree on that. Democrats agree on that. And in agreeing on that, both sides appear to be embracing an argument that’s been rather contentious in recent years: that fiscal stimulus boosts short-term economic growth and budget cuts hurt it.


“The fact that going over the fiscal cliff would hurt the economy in the short run is, to me, basically saying stimulus would help the economy in the short run,” says Brookings economist William Gale. “The whole debate over whether the stimulus is a good idea is answered by those who say going over the fiscal cliff is a bad idea.”

Gale is among the cliff-divers who are pushing for policymakers to go over to force Republicans to accept more revenue. But he only wants to do so if Congress also passes a temporary stimulus measure to boost the economy in the short term — some combination of ”payroll tax cuts, infrastructure investment and aid to the states … [that] would have a bigger ‘bang for the buck’ than extending the Bush tax cuts.”

(more)

[font size="+1"]American masochism: The fiscal cliff is one of the most severe austerity policies in the world[/font]?w=880

[GeorgeGist]

1. PIGS 'n US?

[bemildred]

2. Horseshit, it only hurts the economy if you don't spend it.

If you spend it all, money now sequestered by the wealthy will go back in circulation, the economy will take off like new Ford, and THEN you can start applying the excess to the "deficit", so we can stop paying banks money for nothin'.

[Bill USA]

3. "austerity" means 'not spending it' in that Government revenues exceed expenditures.

[bemildred]

4. No, austerity just means not spending it.

We already know that government revenues have no necessary connection to government expenditures, the Republicans have proved that over and over ever since Raygun.

[AdHocSolver]

5. There are two purposes of so-called austerity measures.

One is to crash the economy and bring on a depression.

Two is to shrink government so as to be able to "drown it in the bathtub".

All economies of whatever type are demand driven. Demand is when people want to purchase goods and services, and in modern economies, that means that they have money to spend.

When people spend money, the economy expands, and when people do not have money to spend, the economy shrinks.

When the people do not have money to spend, the government can prime the economic "pump" by borrowing money and spending it on such items as infrastructure, education, and research and development. Similarly, the government can bail out an automobile industry. Deficits are not a problem so long as the lender is confident that the borrower can repay the debt at some future time.

The wealthy one percent want to weaken the middle class who, for the most part, support government regulation of business to prevent fraud and pollution, and support public health, public education, food safety, social safety nets such as Social security, Medicare, unemployment insurance, and so on.

To this end, the wealthy one percent work to convince the public that government spending hurts the economy (NOT true), and that giving more money to the wealthy helps the economy (also, NOT true).

In fact, restricting government spending weakens the economy, and giving tax breaks and subsidies to the wealthy and corporations which are making profit shrinks spending and shrinks the economy. The wealthy are NOT using money they receive from tax breaks to reinvest in U.S. jobs.

In fact, the wealthy are hoarding their money to shrink the economy so as to eviscerate the middle class and establish a world-wide feudal system.

Fiscal cliff, free trade, and free markets are more nonsense terms and are as "real" as Santa Claus and the tooth fairy.