Austerity

If it ain't broke, don't fix it.

The Law of Supply and Demand has not been repealed.

   In the guise of "rescuing" an economy that he claims to be broken, the president has proposed what is, in effect, an austerity budget that severely cuts spending on programs to help those in need.
   Paradoxically, the plan also reduces revenue by sharply reducing taxes on those with plenty, even as it calls for more spending for the military.
   But the economy is doing reasonably well, with some regions of the country unable to find enough workers to take jobs available. The unemployment rate nationally is down and employment is up as workers respond to the demand. At the same time, the supply of workers is down. Result: Wages rise, responding to a concept taught in Economics 101.
   Meanwhile, analysts have pointed out that the budget at one point lists revenue from the federal estate tax as contributing to the plan to balance, even as the president has promised to eliminate that same tax.
   Sounds like borrowing from Peter to pay Peter.

   Democrats and even some Republicans are weighing to say the plan is "dead on arrival" in the Senate. And Sen. Bob Casey of Pennsylvania warned that Betsy DeVos, the new secretary of education, "has no experience with public education," and prefers to eliminate student loan protections as well as cut public school programs "in order to boost for-profit charter schools with little oversight."
   Nearly every aspect of the proposed budget -- according to what little detail there is -- would sharply reduce federal spending and reduce taxes as a way to revive the economy.
   But the economy isn't dead. The Great Recession is long since over. And any plan that would reduce government revenue while it increases total spending -- for example, on the military, where costs of the U.S. presence in Afghanistan are more than $3 billion monthly and the Pentagon wants another 5,000 troops -- will very likely lead to another economic recession.
   Consider a lesson from history: Britain could not pacify Afghanistan in the 19th Century, and Russia could not settle things in the 20th Century. The U.S. has been trying for nearly 20 years. When will they ever learn?