Austerity equals Jobs?...Fuzzy Math or Voodoo Economics 2.0

Many people remember the 80s when we heard our political leaders speaking about fuzzy math or voodoo economics when it came to describing their opponents economic policies.  In the wake of the great hostage debate, better known as the debt ceiling talks, it would appear that voodoo economics is poised to make a comeback.

In a recent study conducted by the Center for American Progress, a not too surprising correlation has been found between government spending cuts and the job market.  Their study found that the states that cut their budgets lost jobs in proportion to the amount cut from the budget.  Or to put it simply, when states cuts their budgets and reduced spending their unemployment rate increased.   Does this sound familiar?

Paul Krugman thinks this sounds eerily familiar. He likens President Obama's adoption of the rights fiscal mantra to Hoover and his economic policies.  Any economist who studied the Great Depression points to the point in which congress and the President prematurely focus upon the deficit and debt matters as the point in which the second dip in the recession began.  When government stops spending, one doesn't usually see private industry jump in and fill the void, they do the opposite and anticipate reduced demand by shedding jobs and reducing output.

So the Republican Party lead by Speaker Boehner and Senator McConnell are pursuing their stated policy agenda, to ensure Barack Obama has the best chance of being a one term president.  Unfortunately this policy is inherently bad for American's struggling in this economy.  They seem to be as Senator Shumer from NY suggested, opening trying to destroy the economy for political ends.

Bill Maher points out the problem in no uncertain terms, that we continually fail act in our own self-interests and propel ourselves closer to the cliff and thus eliminating every societal gain realized during the 20th Century.  When you have Warren Buffett and others point out that they pay less taxes than their secretaries, we might want to listen.  The 8yrs of George W. Bush's economic policies of lower takes on the wealthy resulted in a net job loss, while Clinton's modest tax increase resulted in the greatest economic boom our nation has ever seen, so the choice become clear.   This latest pitch of low taxes and austerity demanded by Grover Norquist is really just some more fuzzy math and voodoo economics that will do nothing but doom American prosperity. 

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