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Paul Ryan's budget and austerity economics

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Jacquelyn Martin/AP/File

(Read caption) House Budget Committee Chairman Rep. Paul Ryan, R-Wis. leaves a Republican caucus on Capitol Hill in Washington.

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Republicans lost the election but they still shape what’s debated in Washington — the federal budget deficit and so-called “fiscal responsibility.”

The White House’s and the Democrat’s continuing failure to reshape that debate has lead directly and logically to Paul Ryan’s budget plan this week, which is a more regressive version of the same plan American voters resoundingly rejected last November. 

Sadly, the President is playing into the GOP’s hands with a new round of negotiations over a “grand bargain.”

Despite February’s encouraging job numbers, the major challenge is still jobs, wages, growth, and widening inequality — not deficit reduction and fiscal responsibility. 

We’d need numbers like February’s every month for the next four years to get anywhere close to the level of unemployment we had before the Great Recession. But we won’t get there because of the austerity policies the nation has embarked on, and the continuing erosion of the middle class. 

Austerity economics — of which Ryan’s upcoming budget is the most extreme version — is a cruel hoax. Cruel because it hurts most those who are already hurting; a hoax because it doesn’t work. 
The entire framework is based on the false analogy that the federal budget is akin to a family’s budget. 

Families do have to balance their budgets. But that’s precisely why the federal government has to be the spender of last resort when consumer spending falls short of boosting the economy toward full employment.

And as long as income and wealth continue to concentrate at the very top, the broad middle class and those aspiring to join it won’t have the purchasing power to boost the economy. 

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So why even try for a “grand bargain” that won’t deal with these fundamentals but only further legitimize the GOP mythology and further mislead the public about what’s really at stake? 

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