Auserity Measures



Will writes from Washington, D.C. (well, Arlington, Virginia). You can reach him at willblogcorrespondence at gmail dot com.

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32 Responses

  1. Avatar Mike Schilling says:

    Now, in contrast, few American adults have previously seen real economic pain.

    Except for, y’know, poor people.Report

  2. Avatar DJ says:

    I am currently studying in Klaipeda, Lithuania and I can attest to the muted public response to these measures. In conversation with several Lithuanians there is a sort of “what must be done, must be done” mentality, be it cut backs or tax hikes, they recognize that EVERYONE must sacrifice before anything can get better. Quite refreshing if you ask me.Report

    • Avatar Jivatman in reply to DJ says:

      Must indeed be tremendously refreshing to still be a young democracy scarcely out of the clutches of the USSR, feeling real gratitude for liberty and so sharply remembering the horrors of communism.Report

  3. Avatar Jesse Harris says:

    Apparently Lithuania has to stones to do what we cannot. Instead, we demand lots of services and lots of tax cuts. California is truly the bellwether of the nation.Report

  4. Avatar Rufus F. says:

    Will, your point is good.

    Shorter Salam: Thank goodness that Reagan made way for “painful restructuring” because, otherwise the US economy would be a backwater today; luckily though, it’s now an abyss instead. Way to go Reagan!Report

  5. Avatar Francis says:

    1. Dereg started with Carter and had substantial bipartisan support. Please remember that bills start in the legislature.

    2. Innovative firms go elsewhere? Where, Russia / Germany?

    3. Cash-for-clunkers was a stupid bill but pennies on the dollar and is giving the auto industry a chance to rebuild.

    4. The health care legislation is critical to US competitiveness; it makes a major step in decoupling health care from employment.Report

  6. Avatar Steven Donegal says:

    It also might be worth pointing out that the problem in 1980 was considerably different than the problem in 2010, which just might suggest that there could be different solutions to those problems. Believe it or not, austerity may not be the right prescription for the US at this point.Report

    • It’s laughable to suggest that Reagan had anything to do with “austerity measures” back in the 80s. What austerity measures did he produce that actually harmed his own electoral constituency? Reagan basically cut taxes and increased deficit spending. That’s a real austerity measure….right?

      Volcker took steps to kill inflation (and by extension stagflation) stone, cold dead, but in the process probably killed his boss(Carter, remember, not Reagan)’s political career.Report

      • Not quite sure why this posted as a reply…eh.Report

      • Avatar North in reply to Nob Akimoto says:

        It reads perfectly accurate to me Nob, reply or not. Salam is far from partial so it’s no big surprise that he leaves out that Regan was pretty much the ur-Republican borrow-and-spender. Now having read the literature on the era I’m not certain he was wrong, a lot of work had to be done on the tax system and the tax cuts probably did help the economy a lot but we’re in an entirely different situation now. Taxes are pretty low historically. Even once Bush Minors (reconciliation passed) tax cuts expire we’re still be at unremarkable levels of taxation. It seems obvious to me that we’re going to have to preferably follow Lithuania’s lead in cutting spending AND raising taxes. Obama has a tricky needle to thread of course, too much cutting to crudely and abruptly could put the economy down. Same with tax increases. If he can oversee some kind of winding down of Iraq and Afghanistan there’s some good money to be saved there. At the very least he needs to get spending down to below the level of economic growth. I’m watching with great interest/worry at what he does next. He has his left wing legacy legislation in the form of HCR. I hope he starts focusing on the finances now. If he goes for something like climate change or immigration reform instead I’m going to start seriously worrying.Report

  7. Avatar Jivatman says:

    There’s a very obvious and strong general pattern that most of the Former Soviet Block countries have, in general, become very economically conservative.

    Nearly all countries that have adopted a Flat tax system have been from Eastern Europe

    Some countries such as Poland have really begun to see the benefits of heavy privatization, ease of starting businesses, and other forms of economic liberalization.

    In 2009 they were the only economy that never entered a recession or declined in GDP. Before the downturn they had had a 6% per year GDP growth. They’re now 21st worldwide in GDP and almost certain to move upwards.

    It will be fascinating to see Eastern Europe continue to grow quickly in GDP as most of the Western European countries have stagnated and are expected to grow significantly more slowly than even the United States. That’s what the free market does for you.Report

  8. Avatar Freddie says:

    Will, what Reihan says is a reasonable invention, but it is entirely an invention, and we limit our exercises in historical counterfactuals for good reason. Especially when, as is the case here, they so flatter our preferred vision of the world. You’ve got to be less credulous towards things that you agree with.

    Also– what Mike Schilling said, times ten– it’s easy to advocate austerity when you and I won’t be the ones experience what genuine austerity means; what Rufus said; praising Reagan for his “economic austerity” when he was one of the most stunningly profligate and fiscally irresponsible world leaders of the 20th century is just daft; it is in fact a matter of controversy whether the US economy has actually been growing for most of your life, or if in fact we have maintained the appearance of such through creative accounting; and real “restructuring,” Will? Yeah. I’m all aboard. But I doubt you, or Reihan Salam, will like it.Report

    • Avatar Michael Drew in reply to Freddie says:

      I think Rufus really nails it – what fundamental transformation did Reagan usher in other than de-unionization and deregulation that ushered in an industrial transformation allowing the prevailing economic order to be maintained that proved lasting? (I’m sure I will get answers to that question; how convincing they’ll be is another question.) Moreover, where would we be without the information and globalization revolutions that characterized the following decade? (Again, there will be those who say all such roads lead to Reagan as well…)Report

  9. Avatar Kyle says:

    Anyway, back to the real point that perhaps, maybe 70 years of both relative affluence and drastically improved living conditions have significantly changed our cultural (broad-sense) and individual view of what is and is not acceptable w/r/t spending obligations in a way that is divorced from reality.

    Or at the very least encumbers our ability to self-govern in any sustainable fashion.

    Will, it doesn’t seem crazy.

    Also, really, aren’t we past “what about the poor!?” comments/insinuations of callousness? I mean it’s not like the commenters here have taken a vow of poverty and commit every waking moment of their lives to improving the lives of the needy.Report

    • Avatar Jaybird in reply to Kyle says:

      If you point out “WHAT ABOUT THE POOR?” loudly enough, it makes up for that.

      Or so I understand.Report

    • Avatar Mike Schilling in reply to Kyle says:

      Also, really, aren’t we past “what about the poor!?” comments/insinuations of callousness?

      More like obliviousness. If you’re going to get on your high horse about how spoiled people are these days, it’s useful to remember that some people aren’t.Report

      • Avatar Kyle in reply to Mike Schilling says:

        @Mike Schilling,

        The only obliviousness here is quibbling over how a qualified, exclusive statement, doesn’t reference the people its directly not talking about.

        Can anyone here point to how a mention of not-wealthy Americans substantively affects the salient points of Will’s post?

        If Will had modified two sentences, it would’ve mitigated half the comments on this post but changed the substance not one bit.

        That’s the issue I have, here. You say it’s instructive that’s Will doesn’t mention them, then fail to elaborate on anything of substance. You say he was dismissive of the poor, but the poor aren’t terribly germane to the point and it’s clear he’s not dismissing the poor outside of the limited context of the point so unless you have some wonderfully insightful, contributory comment that can connect the two, the comments made seem small, borderline petty.

        As for remembering that some people aren’t spoiled – I think first that’s both subjective and obvious. Of course some people aren’t spoiled. Some people aren’t tall. Some people aren’t Latino. Some people aren’t men. Some people aren’t depressed. Some people aren’t any number of categories…(again, waiting for the insightful comment illustrating how pointing out the poor exist contributes meaningfully here.)

        Second, (and personally) I have a hard time buying the argument that many (if any) Americans aren’t spoiled to some degree. Sure Hartford is bad, but is it Congo bad? Detroit’s bad but is it DPRK bad? Appalachia is bad but is it rural China bad?

        If you expand the context, it’s hard to see how the “what about the poor?” bandwagon isn’t just as obliviously exclusionary as Will was being, if you believe he was in the first place.Report

  10. Avatar OrpheD says:

    Lithuania… Fiscal responsibility and/or madness? A case for the Laffer curve!