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View Diary: Reinhart-Rogoff a week later: Why does this matter? (80 comments)

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  •  Austerity: (15+ / 0-)

    The belief that if we stop spending money on things that really need to be done, somehow things will be better.

    Let's use the household analogy. Suppose that money is tight, and any extraordinary expenditure will have to be financed by borrowing. Your credit is top notch, but you are at the critical point of 90% of your income. You just cannot afford more debt.

    You break a window. Austerity says you must make do with a broken window, even though it will cost you more in heating bills than it costs to fix it. You cannot afford to go into debt to fix the broken window. That would put you at 91% -- unthinkable!

    Yes, life will be tougher. Just suck it up and put on an extra sweater. True, the rain that comes in will ruin the floor, but you can't afford to fix the window, because austerity.

    You live in a bad neighborhood, and if both you and your spouse go to work, the neighbors will come through the broken window and steal you blind. So, one of you must stay home and guard the house.

    For some reason, your medical bills seem to be going up. Could it be that the kids are catching cold more often because of the damp and cold? Damn! That Nyquil is expensive!

    You didn't really have any choice, did you? You could hardly be faulted. After all, going into debt to the tune of 91% would be catastrophic, wouldn't it? So, you adopted the sensible solution: Austerity.

    Good for you.

    Note to Boehner and McConnell: "You don't need a weatherman to know which way the wind blows." --Bob Dylan-- (-7.25, -6.21)

    by Tim DeLaney on Thu Apr 25, 2013 at 11:29:38 AM PDT

    •  This is great (6+ / 0-)

      An even better example might be a leaking roof.

      That would pretty definitely require taking on debt to fix, because it's expensive.

      But the resulting damage from NOT fixing it would be way more than that from a broken window. The entire structure of the house could be damaged. Not only would the roof need to be replaced, you'd likely need to redo the insulation, some of the interior drywall, and you might have mold problems as well.

      It could result in the house being condemned because of structural damage or extensive mold. And you could wind up with everybody in the hospital to boot.

      So not only do you lose your biggest investment, you wind up sick and possibly unable to work, all because you wouldn't take on a few thousand of debt.

      Sounds like a Republican to me...

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