New International Monetary Fund report: Austerity doesn't work.
In Oct the IMF said:
The IMF’s chief economist, Olivier Blanchard, explained that recent efforts among wealthy countries to shrink their deficits — through tax hikes and spending cuts — have been causing far more economic damage than experts had assumed.
Now they have the figures to say:
In “Growth Forecast Errors and Fiscal Multipliers,” Messrs. Blanchard and Leigh calculate IMF and European economists underestimated the euro-for-euro effect of cutting government budgets. While economists expected that cutting a euro from the budget would cost around 50 cents in lost growth, the actual impact was more like 1.50 per euro.
To break that down, for every euro cut from the EU's budget, it cost 1.5 euros in lost growth. I.e a 50% net loss, rather than a 50% gain. The result of course is a recessionary spiral where negative growth prompts more budget cuts, which causes more negative growth.
And the Conservatives here, and the Republicans over there, both want more
austerity budget cuts, without tax rises.
You have to wonder at this point, just what
are they trying to achieve?
Are they really that blind, stupid and wilfully ignorant that they are unable to see the obvious harm and incapable of doing the maths...
or is their real goal to create
and sustain the economic recession, forcing the middle class into poverty and wage-slavery thereby cementing the rule of the plutocratic privileged elite by concentrating the greatest amount of wealth towards the top and their own hands?
<sarcasm>Well of course they've just made a terrible mistake! Naturally they'll put the greater good ahead of their own selfish interests, after all you can trust the rich to be altruistic because they only want what's best for everyone! </sarcasm>
Crossposted from: http://siliconshaman.dreamwidth.org/1072113.html
comments so far over there.