I hate the analogy that Lindsey Graham and his deficit-scold buddies use -- that America is moments away from becoming Greece if we don’t Fix The Debt © now. It’s good for fear mongering to destroy our social safety nets, but not much else. But after seeing the Internation Monetary Fund implore Great Britain to ease off its austerity program so their economy could heal, I had a little change of heart.
See, one of the only reasons why many countries in Europe have suffered so much after the financial collapse has been because, instead of turning towards Keynesian policies that Paul Krugman has begged for, they’ve embraced the Conservative principles that the UK’s Cameron touted. And that decision ushered in very painful austerity measures upon the people of their nations. The effects of those decisions has been a non-existent financial recovery to their economy and an accompanying nightmare to their population.
“The IMF has never been wildly enthusiastic about Osborne's tough austerity plan for the British economy and has been saying for at least a year that the Treasury should ease off if recovery falters. But up until now it has tended to avoid telling Osborne that his policy is failing.
No longer, it appears. "We said that if things look bad at the beginning of 2013 – which they do – then there should be a reassessment of fiscal policy", Blanchard said.
Fiscal policy involves changes to tax and public spending, and Blanchard noted that the chancellor has the perfect opportunity "to take stock and make adjustments" in the March budget, due in less than two months.”
So in a way, Graham is right -- only his formula is wrong. If we don’t want to become Greece (which can't happen, anyway), we should never, ever consider austerity measures or conservative principles. How quickly the world forgets that it was under a conservative George Bush presidency that the global economy collapsed. Why should we ever turn to his acolytes' beliefs to fix the problem now?