Economics and the IMF

The International Monetary Fund strikes me as an organization with some collective economic wisdom, but then again I'm not a Ron Paul supporter who thinks we should abolish institutions wholesale and return to the gold standard.

So I wasn't surprised at all to read the IMF's September 2011 report on the economic dangers of austerity, aptly titled "Painful Medicine." Conventional conservative wisdom - or rather current conservative ideology - believes that the best way to encourage economic growth is to cut government spending. This is, of course, silly, because consumer spending is already depressed. Economies feed on cash, when none is being spent, economies suffer. Cutting public spending when private spending is already in the gutter is not only a bad idea, it is bad practice as evidenced by the austerity experiments in Europe. Despite the fact that we've let the Eurozone be our guinea pig, and despite the fact that the austerity experiment they conducted for us has been a huge failure of economic policy, we are still promoting spending cuts at a time when we should be promoting economic recovery.

The experts at the IMF, as well as those from numerous other organizations, have made this point repeatedly, but it has fallen on the ears of the ideological, deaf to reason that is not their own. Current Republican dogma got America into this recession and will do nothing to pull us from the economic doldrums in which we flounder. Smart people know this. Smart people are not running the Republican party.

So while the IMF and economists tell us that we need to reinvest in America - much as President Obama has articulated - we will refuse to; we will continue to pretend like the deficit, not the economy is the country's biggest problem, and in doing so we will fail to fix either. Economic recovery will lead to deficit reduction, but economic recovery requires sound policy, not policy geared towards stalling the economy until Mitt Romney has a chance to win the White House. Sadly, Republicans care more about Republican political prospects than they do about average Americans or the American economy. Maybe I've had this all wrong and I should be hoping for President Romney. While the man lacks a conscious, he is clearly a moderate. Coupled with Republican Congressional support for a Republican president and Democratic support for policies that will help Americans, a President Romney might be able to enact moderate policies that will spur economic growth.

I have little faith that this will be the case. The best case scenario for America involves an Obama victory and a sweeping away of the far right demagogues who have shackled sensible Republicans to an ideology of economic ruin. Like the IMF, economists, and most Americans, I am hoping for policies that will stimulate our economy. Right now, only one party is interested in achieving that end.