Greece Demonstrates What Austerity to Reduce the Deficit Can Mean for the U.S.

A Lot of What It has Meant for Greece

 

Titos Theonas

Greek Orthodox priest, 48

My annual salary has gone down by the equivalent of two months. In the church, there has been a reduction of about 25 percent in offerings. There are more people coming to the church—mostly businessmen who have lost their businesses and are in economic need.”

The Dismal Political Economist has reported what everyone already knows [Editor's Note:  he does a lot of that], mainly that the focus of U. S. fiscal policy has moved from job creation and economic growth to deficit reduction, which will result in less job creation and lower economic growth.

A policy of reducing government stimulus of the economy in order to address the problem of the government deficit has been imposed on the Greek economy by the European Community and the IMF.  Here are the results.

The most severe consequences of the crisis are being borne not by bondholders but by ordinary Greeks. The economy shrank 5.5 percent in the first quarter. Unemployment has hit 15.9 percent, compared with 11.7 percent just one year ago. Some 30 percent of Greeks under 30 are jobless.

Economic policy is not kind.  If you engage in policy to contract the economy, the policy will contract the economy.  It really is that simple.

So today we have President Obama and the Republicans in rare agreement as to what they want for the U. S., mainly massive cuts in government spending during a period of economic weakness which unfortunately will result in a similar although not nearly as severe results that we see now in Greece. 

Thanks Mr. Obama, Mr. Boehner and Mr. McConnell, we cannot get there without you.