Anti-Austerity

Keep August 2 in the back of your mind. That's the date the US government is expected to exceed the current debt ceiling, meaning that Congress will again have to approve either a higher limit or new spending cuts (or, ha ha ha, new revenues).

Late last year, economist and Time columnist Zachary Karabell reminded his readers of the dangers of austerity during recessionary times:

As Liaquat Ahamed charted in Lords of Finance, his Pulitzer-winning account of central bankers' policymaking before the Great Depression, the orthodoxy of austerity and budget cutting hobbled the world and led to a decade of deflation and depression.

The Tea Party has woven a story of government overreach that includes deficits, health care, job loss and general disdain for Washington and Wall Street elitism. It's a simple narrative fueled by legitimate outrage at the cozy system of influence that characterizes politics today. But as economic policy, it is the 2010 version of what the blind, rigid bankers of the 1920s and '30s offered—and it will sink an already leaking ship.

I'll be watching over the next few months to see if any DC politicians or influential TV media personalities point out the dangers of austerity during tough times.

Who will lead the anti-austerity parade?



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