I respect people who think the top Federal fiscal priorities are reducing the Federal deficit and reducing Federal spending, but those people OWN this slow recovery. Most economists ( without a separate Agenda) agree that the three major reasons for this countrys unusually slow recovery are (1) the bad behavior of Big Banks , primarily related to ways in which sub-prime mortgages were securitized, which created the credit & liquidity crisis in late 2008 before the recovery started in 2009, (2) economic problems in Europe exacerbated by the German led Euro Austerity mandates that drove many European Countries deeper into recession. Basic economics & economic history suggests that a recessionary or slowly recovering economic situation is not the time to dramatically reduce government spending. Some of these Countries have started a slow climb to economic recovery , but are still plagued by economic displacement. Greece for an example has unemployment that is close to 30%. The Irony is that the German government is claiming credit for the slow recovery that is taking place in several Countries when their policies imposed on European Union Counties delayed what modest recovery is taking place and (3) our own policies led by the President & Congress ( they differ only in degree) emphasizing reducing our deficit and federal expenditures while in economic recovery. Since the recovery started in 2009 gains in private employment have been largely offset by reductions in Public employment. We have chosen this course because of political posturing, an astounding ignorance of basic economics by our political leaders and our failure to learn from past economic policy mistakes.
Posted on: Sat, 10 May 2014 19:48:10 +0000
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