Call it a victory for Military Keynesianism theory as today’s dreadful GDP numbers seem to be a result of a drop off in military spending.
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.
The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.
I guess government spending does drive the economy after all. Maybe America’s free market economy is more centrally planned than conservatives want to admit.
In any case, if for some reason it was not before it should be painfully obvious now that austerity does not work. Cutting spending slows growth under general conditions cutting spending while the economy is weak is truly stupid. Progressives would love to spend the money on things other than war but the facts remain vis a vis austerity as today’s numbers clearly demonstrate.
Of course anyone paying attention already knows this. No country has willingly embraced austerity like the United Kingdom, with horrendous results. Not to mention those that have unwillingly embraced austerity like Greece. So why are we now getting ready to cut social security, medicare, and other investments in society?
Austerity is Wall Street’s plan – why are we allowing them to run our country into the ground (again)?