The siren call of cost-cutting to balance a national budget continues to whine its way through the semi-conscious thought of the True Believers. Despite the lessons of history and long experience that budget-cutting only builds more obstacles on the road to prosperity, the True Believers invent new names to label the old, unworkable strategies.
Fiscal consolidation and sequester are just the latest examples of relabeling to disguise an old product that may sell well to the 1 percent who don't need it, but is distasteful to the 99 percent, who won't buy it.
It's a universal issue, not limited to America, but based on economic principles and observed history. And you don't have to stay home to find examples.
Consider this analysis:
"Heightened domestic uncertainty, government underspending, and a difficult external environment have contributed to a marked economic slowdown.
"In the short term, the government needs to overcome recent budget under-spending and allow a higher budget deficit later this year, to the extent that revenues are lower due to the slowdown. Further monetary loosening, coupled with measures to strengthen the transmission mechanism, also appears warranted. Political stability together with greater clarity on government policies would also help reduce business uncertainty."
Sound familiar? It's an analysis with recommendations that are needed in America, but it's not about America. It's from a critique by the International Monetary Fund about current economic issues in the East European Republic of Georgia. The economy has slowed there, for the reasons given.
Comparisons to other nations can be dicey, but some economic principles are universal. One is that government intervention is imperative when an economy falters, remembering that government should step back when business and consumer confidence and activity resumes.
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