2 ms·

"As for governments, the austerity meme is class politics in disguise, and tends to lead to nasty social blowback." The prevailing neo-liberal (and progressive

by rsync 11y ago

"As for governments, the austerity meme is class politics in disguise, and tends to lead to nasty social blowback." The prevailing neo-liberal (and progressive, at least in the US) notion is that smart people "understand" keynesian counter-cyclical economics and only dopes or rubes ... or bad actors (as you suggest) would advocate for austerity. However, it really needs to be repeated: austerity is only braindead if you insist on ever-increasing aggregate demand. If you are willing to accept stagnant or even decreasing aggregate demand (for whatever reason) then austerity is perfectly reasonable and perhaps a good choice. I'm not saying I'm in that camp, but I really don't like this false dichotomy - that austerity is braindead and only morons would advocate for it ... and leaving unsaid the almost universal assumption that aggregate demand can never, ever, be allowed to drop. EDIT: and I also don't like the condescending, custodial tone that this always takes ... "oh how quaint that you would conflate a national economy with a household economy, here let me mansplain it to you". In fact, there are boundary conditions where they behave exactly the same (see argentina). People aren't as dumb as you think they are.

inthewoods 11y ago
"However, it really needs to be repeated: austerity is only braindead if you insist on ever-increasing aggregate demand. If you are willing to accept stagnant or even decreasing aggregate demand (for whatever reason) then austerity is perfectly reasonable and perhaps a good choice." I think the problem is that austerity advocates argue that that aggregate demand will increase in the face of austerity, when we know that doesn't happen. Austerity advocates then often bring up the theory that if debt is lower, then external actors will have more confidence in the country and interest rates will decline. So while I agree with you that no one needs to be condescending, it is challenging to deal with the pro-austerity folks when they seem to be fact-challenged.

by rsync 11y ago

inthewoods 11y ago

"However, it really needs to be repeated: austerity is only braindead if you insist on ever-increasing aggregate demand. If you are willing to accept stagnant or even decreasing aggregate demand (for whatever reason) then austerity is perfectly reasonable and perhaps a good choice." I think the problem is that austerity advocates argue that that aggregate demand will increase in the face of austerity, when we know that doesn't happen. Austerity advocates then often bring up the theory that if debt is lower, then external actors will have more confidence in the country and interest rates will decline. So while I agree with you that no one needs to be condescending, it is challenging to deal with the pro-austerity folks when they seem to be fact-challenged.