IMF Report: Austerity Doesn't Work

A recent staff report from the International Monetary Fund paints a grim picture of the effects of austerity policies undertaken by conservative European governments in the past four years. As George Logothesis at Daily Kos summarizes,

Austerity born on the backs of the 99 percent doesn't work. It not only doesn't fix the problem, it makes it worse by exacerbating a country's economic problems. The fact that austerity in Europe resulted in 1.50 euros of lost growth for every euro cut should serve as a major wake-up call to American politicians here at home. Giving in to the debt fetishists and cutting simply for the sake of cutting—and cutting from society's safety nets—while neglecting at the same time to push forward any robust pro-growth strategy ensures a nightmare situation. The middle class can't be sacrificed in an attempt to bring a country's books into the black. (our emphasis)

Yet, the drumbeat continues here for "deficit reduction" (i.e., "slashing entitlements and social programs"), from the likes of plutocrat Pete Peterson (who wants to get his hands on the Social Security trust fund and start playing with it on Wall Street), the CEOs of the "Fix the Debt" crowd, the once great Washington Post Kaplan Daily editorial board and much of the "mainstream media," and the conservative pols who are using as cover the Beltway mania for "deficit reduction" to undercut or end popular and effective programs such as Medicare, Medicaid and, yes, Social Security. In this report, the lessons of Europe are plain to see. The onerous consequences can be avoided if political will can be mustered to defeat the "debt fetishists" here in America.