The Economist have the following graph on their site at the moment (link).
This is a fascinating graph. The location of SA mid-table is interesting, I would hazard a guess that wealthy South Africans spend a similar of their incomes on food and drink as the British.
It is unsurprising…
Smart fiscal policy involves having the government spend when the private sector won’t, supporting the economy when it is weak and reducing debt only when it is strong. Yet the cyclically adjusted deficit as a share of G.D.P. is currently about what it was in 2006, at the height of the housing boom — and it is headed down.
Yes, we’ll want to reduce deficits once the economy recovers, and there are gratifying signs that a solid recovery is finally under way. But unemployment, especially long-term unemployment, is still unacceptably high. “The boom, not the slump, is the time for austerity,” John Maynard Keynes declared many years ago. He was right — all you have to do is look at Europe to see the disastrous effects of austerity on weak economies. And this is still nothing like a boom.
Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.
But we aren’t. The deficit is indeed dwindling, and the case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished."
Jon Queally | Common Dreams »
A new online resource launched on Thursday aims to show that behind the scenes of the ongoing fiscal battles in Washington—including the current fight over ‘sequestration’—a billionaire-funded and CEO-backed media campaign is operating as an ‘astroturf supergroup,’ using its outsized pocketbook and influence to peddle long-discredited policy prescriptions for the ailing economy.
According to a new joint investigative project between the Center for Media and Democracy and The Nation magazine, the ‘Fix The Debt’ campaign—which launched itself last year in the midst of an earlier episode in the “fiscal crisis charades” that have plagued Washington since the Republicans regained control of the House of Representatives in 2010— is “one of the most hypocritical corporate PR campaigns” created in Washington in decades.
This group is comprised of an all-too familiar chorus of people—culled from a cadre of politicians and wealthy elites—who spend their days voicing the mantra of ‘deficit reduction’ and ‘entitlement reform’ as a way to liberate the federal budget from debt and kick start the economy with promises of jobs and growth.
And according to the new investigation—in addition to being wrong most of the time—the members of the group share two other common bonds. Wealth and corporate power… >continue<
As much should be expected when so much question begging is so damned obvious.
related: Pete Peterson’s Austerity Crusade
Rolling Stone: “You sometimes use the term “fair shake.” FDR had the New Deal, Lyndon Johnson had the Great Society. Is the Fair Shake something you’d be comfortable with to describe your legacy?”
Obama: “I’d be comfortable with that, and hearing it from a historian, it sounds pretty good to me.
But look, the key thing I’ve tried to communicate, and I will continue to try to communicate to the American people, is that when you talk about economic fairness, it’s not just an issue of fairness – it’s also an issue of growth. It’s how the economy succeeds. Republicans, and certainly Mitt Romney, often tries to frame this as “Obama’s a redistributionist, whereas we want to grow the pie instead of taking from Peter to pay Paul.” But look at our history: When we’ve been successful, it’s because everybody is in on the action. Everybody feels a sense of ownership, because everybody is benefitting from rising productivity, everybody is benefitting from a growing economy. When prosperity is broad-based, it is stable, it is steady, it is robust.
But when you have just a few people at the very top benefitting from what we do together as an economy, then growth gets constrained. On one end, you’ve got a lot of money in the hands of a very few people who are speculating and engaging in a lot of financial transactions that can get our economy in trouble. We saw that in 2007 and 2008. On the other end, you’ve got middle-income people and low-income people who are overextended, taking on too much debt, and that can create problems. You don’t have enough customers to buy the products and services that are being produced, so businesses then pull back and you get into a negative cycle. When the opposite is the case, you get into a virtuous cycle, and that’s what we’re constantly trying to push.” >continue<
It seems self-evident that tax-cuts should stimulate the economy. It seems so self-evident, that we discuss the theory as if it were a known fact. We don’t even question the claim. But history offers us some evidence that tax cuts don’t stimulate the economy.
Citizen Zed - 8/16/12 »
Everywhere we’re supposed to buy the cookie cutter factoid that the economy helps Romney. That’s the way it’s always been. Such things always hurt the incumbent. This truism, once it percolates through the den of paint-by-numbers “political” consultancy, issues forth in a thick, steaming carafe of GOP squawking points. Obama is a failure. Everything he’s done is an epic fail. The stimulus, that latest example of government trying to do what it can’t, was a failure.
Just when you think it’s all so incontestably obvious, perhaps even as a “leftist” bemoaning the lack of a bigger stimulus, comes an interesting long read, one which traffics in such quaint notions as rationality, empirical detail and history regarding the “failed” stimulus. In “Think Again: Obama’s New Deal, The president’s Republican critics are dead wrong. The Stimulus worked.”, Michael Grunwald writes:
"When it comes to the Recovery Act, the facts are on Obama’s side.
For starters, there is voluminous evidence that the stimulus did provide real stimulus, helping to stop a terrifying free-fall, avert a second Depression, and end a brutal recession…
Politically, it’s awkward for the president to argue that without the stimulus, the bad economy would have been much worse. It sounds lame to point out that recessions caused by financial meltdowns tend to be unusually long and nasty. But it’s true.” >continue<
Awkward enough, that is, to where Karl Rove likely rubs his hands, anticipating Obama coaxed into lecturing like a professor while studiously attempting to limn out the facts. “Come on Obama, quit making excuses, quit teaching - and better yet, get out of the way and let those that can do take the reins. The failure is just all so obvious as to make a mockery of tedious academic apology.” So goes the predictable line in a world where the “intellectuality” of Paul Ryan amounts to the prize in a Cracker Jack box, where the dramaturgy and “substance” of politics has the flavor of professional wrestling.
If one unreflectively trades with the currency of a pre-2008 mentality, a frame harkening back to a fat, happy yet unravelling time, where entertainment might suffice for politics, all this might have better traction. Then the economy might automatically help Romney. Polls appear to show, however, that voters are wary of this game - perhaps like dogs unaccountably wary of antifreeze. They may not be ready to retroactively retire the Reagan Revolution but there appears to be a willingness to pause before reactively handing the keys back to the GOP. They may reckon, with legitimate suspicion, that even our out-sized expectations of presidents can’t muster the requisite suspension of disbelief necessary to hold Obama accountable for smoothly pulling a recovery out of a hat.
Countering the dawning of adult cognition, Romney and the GOP quadruple down with talk of failure. If they can’t convince by framing with labels, slight of hand proceeds to loudly repeat bare conclusions free of either tested premises or the actual structure of argument - and free of the political context whereby a “loyal opposition” has engaged in every contortion imaginable to torque Washington into abject deadlock. The party of Atwater, Rove, and Ailes cries foul at any interrogation, fingering Obama as hateful and divisive - and thus “distracted” from the real job of recovery. But it’s this act that’s the distraction, engaged in the worn out game of projecting and hanging its essence upon another.
The managers of this “discourse” don’t worry that anyone in the target demographic will be shocked by pushing every nonsensical claim imaginable against Obama, studded with the repetition of remarks so wrenched out of context as to problematize an Onion parody. Indeed, they trade on the confidence that if you’re a Tea Party dude lacking 6th grade reading skills, you didn’t get that. It’s an austerity eschewing science, empirical grounding or intellectual honesty. It’s an austerity impoverished enough to celebrate pulling stuff out of its ass, forever stuck in the loud denial of what 2008 meant and continues to mean.