Austerity is Poison

   Money is the lifeblood of any economy. When the money flow stops, the body politic suffers. Austerity on a national level only stifles the money flow, and thus sickens the entire economy.

   Republican presidential candidate Jeb Bush wants to cut the government workforce by 10 percent, reduce government spending, and mandate a balanced budget through a Constitutional amendment.
   This is an economic recipe for disaster, and here's why.
   Cutting the government workforce means more people out of work, therefore they have less money to spend.
   Reducing government spending further weakens the economic body politic, by slowing the flow of money.
   A balanced budget is a fine idea in good times, but when times get tough government plays a major role in getting things going again, largely because the private sector can't.
   There are two ways to balance a government budget: Raise taxes or reduce spending. Either means less money available to workers and consumers to buy stuff. Doing both is a double dose of economic poison. Fewer sales means less production, and soon fewer workers as companies reduce employment levels. More people out of work means less money to spend, which means fewer purchases, which means less production, which means fewer workers. And around and down it goes.
   To stop the downward cycle, government steps in to spend money and provide jobs, which means more workers, more money in the economic lifeblood, which means more purchases, which means more production, which means economic recovery.
   Simplistic? Yes, but that's what happened during the Great Depression in the 1930s, as well as the more recent Great Recession less than 10 years ago.
   "Buy now," said the Republican President in the early 1930s.
   "With what?" replied the out-of-work American laborer.
   The tragedy in Greece can only worsen, as unemployment soars and banks close and a bankrupt government cannot get help from those who insist on national austerity. That's well enough to say by prosperous, moralistic countries with leaders who have forgotten the lessons their parents learned during the worldwide catastrophe of 75 years ago.
   "Austerity is the cure," they say.
   On the contrary, austerity is poison, and to insist on massive, widespread reductions in government workforce and spending can only lead to another economic downturn in America. Unless there is a prosperity boom in the private sector. Until that happens, the federal government can and should step in with a fiscal infusion to maintain the flow.