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Please begin with an informative title:

Why does the neoliberal austerity meme always win in today's world?


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As long as both the rich and poor are convinced (erroneously) that the US has run out of money, they will blame each other for the problem. So what we've got going on here are rich people trying to protect their bulging (but vulnerable) assets from the grimy hands of the poor and the poor just trying to get the rich to share a little bit of the shrinking pot of financial resources; and a President who is trying to minimize the pain of this economic shortage by being "the adult in the room" and embracing a shrinking economy (entitlement deficit reductions) as the only way to stabilize and share moral responsibility.  

All of this is taking place in a world where moral responsibility has become a one-dimensional construct of free market ideology. All morality has become microeconomic in nature--what's good is only that which is good for the individual.  There is no longer any sense of macroeconomic morality where the good of the whole takes precedence.  Hence we have a whole entity, the government, that must act like an individual, the household, when in fact the moral imperative of the whole, the government, is to manage the fallacy of composition between the individual and the whole. In other words, what's good for the individual is not always what's good for the whole: if one person saves it can be good for him, but if everyone saves it will be bad for the economy and lead to recession.  So we've got a government, endowed with the monopoly of money creation to promote the macroeconomic employment of both human and capital resources, acting like it has run out of that power and standing back like an individual, watching the economy collapse for the lack of that which it has the power to create in limitless supplies while mountains of unused capacity withers in the streets.

All the while, the "makers" and the "takers" are uselessly pointing fingers at each other while the compromising "Emperor in the room" is wearing no clothes!

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