Paul Ryan equals austerity. This is what he has pushed in the Republican budget. He and other conservatives have basically told us that we need to “get our house in order.” This is what we need. The question that I have to Paul Ryan and other conservatives is whether they have any examples where an economy in a recession which adopts austerity measures begins to prosper. Let’s just think about this for half a second. Currently, we are in a “mini recession.” By definition, a recession is decreased demand. We aren’t buying anything. Don’t believe me? Read the annual report from the US Bureau of Labor Statistics. Americans are spending less. If Americans are spending less, then there is less demand. In the face of less demand, Paul Ryan and other conservative Republicans are telling us that the government needs to spend less. Wouldn’t that decrease demand even more? Of course it would.
This chart is from the IMF (International Monetary Fund). They looked at what has happened when countries with advanced economies put the brakes on growth or tried the austerity game over the last 30 years. Their conclusions fly in the face of what Paul Ryan and other conservatives have been telling us. They conclude “that consolidation lowers incomes in the short term, with wage earners taking more of a hit than others; it also raises unemployment, particularly long-term unemployment.” So, under recessionary conditions austerity lowers income and increases unemployment, particularly long-term unemployment. That’s exactly the wrong medicine for our economy. We want to increase income. We want to increase employment. Paul Ryan’s medicine simply doesn’t work.