On the face of it, one would think that it's insane to freeze or cut federal spending and slash state and local spending in an economy as weak as ours is today. But the truth is that critics of austerity like Krugman, Stiglitz, and Dean Baker just don't have the brainpower to understand how austerity measures figure into the brilliant Rubinite plan for economic prosperity.
There is a simple 8-step process through which neoliberal austerity measures lead to unimaginable wealth and prosperity for everyone.
- Slash government spending at all levels. Cut pensions, health care, education, police, infrastructure, and anything else policymakers can think of, while selling off as many government assets (such as parks, roads, forrests, etc.) as possible.
- Deficits fall and public debts starts getting paid off.
- Businesses see deficits falling and are inpired with confidence about future economic prospects.
- Newly confident businesses become eager to expand.
- The Federal Reserve makes nearly unlimited credit available to the nations's leading banks at virtually zero percent interest.
- Banks invest their Fed-given capital by loaning it out to all the confident American businesses that are just chomping at the bit to expand.
- Companies expand, hiring millions of new workers, lowering unemployment, and bringing wages up.
- All these new hires, suddenly flush with cash, go out and spend it, thereby driving up demand and increasing business confidence even further.
The end result of all this is a virtuous cycle of never-ending increases in prosperity.
And if you believe in this bullshit or have any trust in leaders who do, I have got some damn fine beachfront property in Nevada for sale that you just might be interested in.