Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 4, 2014 at 10:22 AM

Get ready for more austerity

Much of the media have committed malpractice this campaign by, as usual, focusing on polls, personalities and the horse race. This brings at least two problems. It fails to illuminate the issues and hold candidates accountable for their records and stands. And it can actually dampen turnout if voters for the side the polls predict will lose don’t bother to vote.

But if the polls are correct and Republicans take control of the Senate, one economic outcome is certain: There will be a doubling down on austerity. Here’s how it’s been working so far:

Austerity1

Austerity2

Austerity3

With the GOP in control of the House, where appropriations must pass, in a blocking position in the Senate, and setting the national conversation, federal spending has plummeted. Yet private consumption and corporate spending haven’t made up the gap in demand. No wonder the economy remains slow, so many millions are unemployed and underemployed, and wage growth is nil.

Here’s how Ronald Reagan and Tip O’Neill handled the aftermath of the 1981-82 recession, the worst downturn since the Great Depression — until the Great Recession:

Reagan1

And lest you think most of the spending was the Reagan defense buildup, there’s this context:

REAGAN2

Austerity is a terrible idea and the root of much of voter dissatisfaction over the economy. But if the polls are correct, we’re about to double down on more. Next up: New threats to shut down the government and default on U.S. debt.


Today’s Econ Haiku:

Apple Seattle

Come on in, the tech is fine

And move to the core


 

 

 

Comments | More in Politics and the economy | Topics: Austerity, Election 2014

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►