Friday, May 18, 2012

Cameron To The Rescue.

Do you remember David Cameron? He was the conservative Prime Minister of England. I only mention him for two reasons. He is a conservative and he's recommending that Germany shore up weaker states on the periphery.  Shore up weaker states on the periphery? Isn't that a liberal approach to a problem? The rich should help the poor? Germany has a conservative leader in Angela Merkel and they've been demanding that those weak countries must tighten their belts and live with extreme austerity in order to lift themselves out of financial difficulty. It hasn't been working. In fact those weak countries have been getting weaker because of austerity. Even England hasn't been improving with it's own brand of austerity. Does that ring a bell? Here in America, there are two camps, two different plans for a solution to our own financial problems. The first camp wants us to cut entitlements to the absolute bone, no matter who gets hurt, in order to save the country. That's austerity. The other camp believes we need to spend, smartly, to help grow our economy back to health. But austerity hasn't and isn't working in Europe, so why would we think it will work here? If you fire a couple of million government workers to save money by making government smaller, and you don't calculate how many other people and workers you affect, you leave yourself wide open for an unpleasant surprise. Because a couple million new unemployed who will get unemployment compensation, the government will have to pay for, but you also get a couple of million more unemployed who were dependant on those government workers to buy goods and services from them. It winds up costing the government as much or more as it did to keep the workers in the first place. That, and you have that many more people looking for jobs that no longer exist. I'm not suggesting the government hire all unemployed workers, but I am suggesting the government look for ways to stimulate the economy, not burden it further.

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