Krugman: Our Incredible Shrinking Government (and the dip in 4th quarter GDP)

[caseymoz]

2. Austerity isn't a recovery plan.

The people who say it is either misunderstand, or are in denial, about what it really is.

Austerity is the wealthy demanding that they be paid no matter what.

The wealthy "support" government more with bonds. The rest of us support it with taxes. Since interest on the bonds have to eventually be paid by tax revenue, it means money is being transferred to the wealthy.

When the economy turns down, the wealthy want to be sure, above all else, that they will be paid. Therefore, they'll put out propaganda lauding the value of austerity. What they're doing is just making sure the money goes only toward them, not to anyone else.

It's class warfare at its most basic level. It's not a program for recovery.