[lbo-talk] lbo-talk Digest, Vol 817, Issue 2

Politicus E. epoliticus at gmail.com
Fri Mar 27 06:35:40 PDT 2009


Hi. I agree that austerity may well be on the agenda for future fiscal years; my intent was to assert that the present budget being debated does not have substantial elements of austerity. I am perfectly willing to concede that the next time, we'll get a structural adjustment program.

With respect to the numbers that I provided, the commonly accepted measure of austerity among economists is the deficit-GDP ratio. Thus, when the IMF imposed structural adjustment programs on the South it did so by mainly specifying a limit on this ratio. It did not really care what was cut, so long as the target was met. Of course, you are right, it also depends on what is being funded, though.

I had no comment on Chossudovsky because I am uninformed about his views. Thanks for pointing it out. I will take a look.

epoliticus

Politicus E [suggesting skepticism that Obama?s budget is an austerity
> budget]: ??the on-budget deficit will be 14.1% of GDP in 2009,
> 10.4% in 2010, 7.3% in 2011, and about 5% by the time of the next
> presidential election.?
>
> Doug H: ?CBO projections are cautious in the sense that they mostly
> extrapolate the
> present into the future. There's no austerity baked in right now, but it
> wouldn't surprise me at all to see it evolve in the coming months.?
>
> Well, austerity depends not only on the gross total budget, but on
> *what* is being funded, yes? The much-maligned Chossudovsky argued (in
> an earlier link on this list) that once the Pentagon and finance
> industry bailouts are accounted for in the Obama budget, there is
> simply nothing left based on any reasonable revenue projections, even
> allowing for the massive expected debt. So he concludes that, rhetoric
> aside, an austerity/de facto structural adjustment program is all
> there *can* be for the other more popular and more productive
> functions of government.
>
> I would happily consign his simple conclusion to the "simplistic" or
> "simple-minded" pile if it can be rebutted; it hasn't been rebutted
> here, maybe because no one sees the need, and maybe for good reason. I
> admit I'm not enough of a federal budget expert to be able to tell if
> Chossudovksy's pointing out something hiding in plain sight, or is
> just being a crank. Anybody know?
>
>



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