austerity poster

Kuttner understands proven economics. He writes:

Despite the sheer unreality of their claims, the austerity lobby keeps winning by defining the terms of debate. Nearly everyone, right, center and left, is arguing about the economic recovery in terms of what the debt-to-GDP ratio should be in 2023.

People: this is the wrong debate. Has any of these worthies taken a macro-economics course? If you slow down growth by excessive belt-tightening, tax revenues fall and the deficit goes up. You can’t just assume that very dollar of deficit reduction equals a dollar credited to reduction of the debt ratio. For budget wonks, this very useful piece by EPI’s Ethan Pollack lays it all out. President Obama should read every word of this.

In what passes for the debate about the budget and the economy…the main driver of rising deficits over the long term is Medicare. You fix Medicare by reforming the larger health system of which it is a part, not by sandbagging the rest of the budget and economy.

In sum: unless we stop obsessing on cutting the debt ratio as an end in itself, we are condemned to a decade of economic underperformance. President Obama got some nice political lift from his re-election and his new, more assertive tone. But he (and the economy) are still dragged down by the undertow of bad economic assumptions that continue to contour the debate.

Robert Kuttner is:

  • co-founder and co-editor of The American Prospect magazine
  • a Distinguished Senior Fellow at the think tank Demos.
  • was a longtime columnist for Business Week.
  • a writer whose articles have appeared in The New York Times Magazine and Book Review, the Boston Globe, The Atlantic, The New Republic, The New Yorker, Dissent, Columbia Journalism Review, Harvard Business Review, and The New England Journal of Medicine.
  • a columnist for
  • author of  “The Squandering of America, exploring the political roots of America’s narrowing prosperity and the systemic risks facing the U.S. economy”  – his seventh book.
  • Winnder of the Sidney Hillman Journalism Award for that book.

Bob’s best-known earlier book is “Everything for Sale: The Virtues and
Limits of Markets (1997),” which received a page one review in the New York Times Book Review. Of it, the late economist Robert Heilbroner Robert Heilbroner wrote:

I have never seen the market system better described, more intelligently appreciated, or more trenchantly criticized than in Everything for Sale.

Bob’s other previous books on economics and politics include; The End of Laissez-Faire (1991); The Life of the Party (1987); The Economic Illusion (1984); and Revolt of the Haves (1980).


Advertisements