The New York Times and Fiscal Austerity

The New York Times is devoting a lot of space recently to debunking the Republican’s supposed campaign to inflict fiscal austerity on the United States.  My May 10, 2013 blog entry responded to an NYT article on May 9 entitled “Emphasis on Deficit Reduction Is Seen by Economists as Impeding Recovery”.  Now they’re at it again!  Today there’s an Op Ed entitled “How Austerity Kills”, by David Stuckler and Sanjay Basu.  The authors state that “Recessions aren’t necessarily deadly.  But harsh spending cuts are”.
It needs to be pointed out over and over again, as often as necessary until it sinks in, that the current year’s federal budget does not represent a cut.  In 2012 actual expenditures were $3,538 billion while the 2013 federal expenditure budget, as estimated three months ago (in February 2013) by the Congressional Budget Office, is $3,553 billion.  This represents an increase of $15 billion from last year’s (2012) expenditures to this year’s (2013) estimated expenditures.  Holding down budget increases from one year to the next, at a time of enormous deficits, is exactly what our elected representatives ought to be doing.  If Mr. Stuckler and Mr. Basu want to argue that the sequester adjustments represent a poor way of holding back on large spending increases, then many Republicans, including myself, would agree with them.  Let’s definitely reduce spending increases in a more intelligent way!
But the larger issue is the question of austerity itself.  We’ve now had four years in a row of trillion dollar deficits and this year’s deficit is predicted by CBO to be $845 billion.  CBO projects deficits of $616 billion for 2014, $430 billion for 2015, and then annual deficits which start growing again (under current policy) and returning to the trillion dollar level by 2023.  This represents $7 trillion in additional debt by 2023 beyond the $6 trillion in debt already accumulated in the last five years.  To continue on this projected path is the height of irresponsibility!  And for the New York Times to refer to this amount of excessive spending as austerity is ludicrous, simply ludicrous!

2 thoughts on “The New York Times and Fiscal Austerity

  1. The reality is democracy does not work once the people discover they can vote themselves a free lunch. All that is described above is a result of that sordid reality. This rant about the “height of irresponsibility” will get a lot of positive talk, a lot of agreement, but no one will cut entitlements. It is impossible to cut entitlements because any politician like that can never be elected. What we end up with is voting for a politician who either has a hidden or undisclosed agenda (Obama) or the best liar. Electing fiscally responsible politicians ain’t gonna happen.

  2. As usual, you may be right! There is no guarantee that we can pull ourselves out of the deep hole we have fallen into. But we still have to try to do it. One thing that will help is to emphasize that entitlement benefit payments need not actually be cut. Their rate of increase simply has to be slowed down. For the past few years health care costs have been increasing at the rate of about 4% which is much slower than average. But its still more than twice the rate of inflation which has been under 2% since 2009. The goal has to be for Medicare costs, for example, to grow not much faster than the rate of inflation over time. This will be a huge challenge to accomplish, of course, but it is not the same as cutting benefits!
    The question for me is whether or not we can make such common sense changes before we run up such an enormous debt that the financial markets collapse and we have another huge crisis, much worse than the Great Recession.

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