Why the GOP calls for extreme austerity make no sense

[LuckyTheDog]

First of all, even in business it's accepted wisdom that cutting costs is not the way to get out of a financial bind.

Sure, you might have to cut spending some times when money is tight. But most consultants will say that it's wise to keep up investing in marketing and R&D even in bad times, to the extent that you can. Firing your best people (who are often the most expensive) also is something that should be considered a last resort.

Cost-cutting is a sometimes-necessary short-term tactic. But the best strategic position is to do things that increase revenue down the road. You can't cost-cut your way to success and growth.

And when I look at my own life, I certainly am glad that I have not taken the kind of advice the Republicans are dishing out now. When I was young, I was pretty poor and had no meaningful family resources to fall back on. Just about every job I could get paid the minimum wage. So, looking at things from a Republican-in-2011 point of view, my choices were clear. I had no business borrowing $8,000 in student loans -- spending money I didn't have -- in order to pay college tuition.

Applying Republican logic, that kind of reckless spending should have been out of the question. My goals should have centered on cutting my costs and "living within my means." The very idea that I would cut back my working hours -- reducing my already meager earnings -- and borrow money at that point made no sense. But guess what, I did it anyway and it paid off.

Investing in the future is NOT the same as spending. The money I spent on college was not just a "spending spree." It is what elevated me from washing dishes on the overnight shift in an all-night restaurant and allowed me to get a real job. My life was immeasurably improved by my decision, in my 20s, to NOT live within my means. I went into debt to lay the foundation of a better future. I am glad I did.

I hope the United States is smart enough to invest in itself as well.

[lumberjack_jeff]

1. It doesn't make sense until you look at the lemming.

Conservatives cheer for chaos. It validates their decision to spend their income on ammo.

[handmade34]

2. they are only calling for "extreme austerity"

with/for anything that has to do with people they don't know/don't like... they know how business works...

the Republicans are not representing people, they are representing a system...

[backscatter712]

3. They want the American people to suffer, so they can gain power through fearmongering.

The Glenn Becks can only gain traction when the people are miserable, deprived and fearful. Through deprivation, they make us vulnerable to demagoguery, and can seize more power.

[DemocracyInaction]

4. As I said...

...in another post - the US economy is NOT just like your stupid personal checkbook. It can't be run like your household budget. The government right now is the only means to start spending and stimulate the economy. If it pulls in, then absolutely nothing is moving.

[Populist_Prole]

5. I think they're just trying to grab everything they can while they think they can

and that even when ( if? ) the pendulum swings back the other way, there will be so much ground that will need to recovered that the working class still won't fully recover when it swings back again.

Basically, they're going for broke in one big titanic all-or-nothing push. Betting the ranch, they are.

[Possumpoint]

6. Get Real

Invalid analogy of grapes to grapefruit. You didn't put yourself into debt 60% of your life time worth with the potential of it becoming 100% in a couple of years because of continued spending beyond your means.

Debt service alone will soon demand the entire proceeds of the personal income tax as it now stands. Without substantial across the board cuts in spending with an increase of revenue, the end result for our economy will be another Greek tragedy.

[Hannah Bell]

7. the us debt isn't 60% of its "lifetime worth." whatever that means.

Current US debt (14,083,345,766,082.15) is less than 2009 US GDP ($14,624,184,000,000.)

http://www.treasurydirect.gov/NP/BPDLogin?application=np

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

About $5 trillion of it is internal debt, some of which cancels itself out.


According to you, if my husband borrows $100K for a house but our family only makes $50K, we're on the verge of apocalypse.

For a household, reducing household expenses to pay off a debt makes sense.

For a country, reducing household expenses to pay off debt = destruction of the income-generation potential of the country in order to enrich a small fraction of the populace.

[LuckyTheDog]

8. Ummmm.... Get a clue

I have no idea where your "data" comes from. So I won't address your apparently nonsensical numbers. But I am not arguing for increasing the debt as a percentage of GDP over the long term. I am suggesting we do what we did after WWII -- we invested in economic growth and GREW INTO the debt. After that, we reduced it as a percentage of GDP over time. And, if not for the dumb-ass decisions of the Bush Administration, we'd be on the verge of paying it off by now.

The U.S. needs to keep investing in education of infrastructure. If we don't we'll be like I would have been had I decided 30 years ago to keep cutting costs to match my income. We'd be living in a nation-size cardboard box behind the mall.

[GeorgeGist]

9. Insanity made simple.

Extreme austerity for US means more for THEM.