To cope with the economic crisis we need austerity with compassion. Stimulus as a policy will likely make things worse more quickly and austerity as currently practiced is mean and hurting victims. Those people voting for politicians urging austerity may regret their votes when they too get caught in the crisis.
Compassionate austerity would recognize we are dealing with events beyond our control and would therefore not blame the victims. It would include some sort of income support for people caught in the crisis
How one wants to deal with the economic crisis depends upon how strongly one believes in economic growth. If one believes this is just a temporary setback, then one probably wants either stimulus to keep things going or some austerity until the economy corrects itself and growth returns. This blogger figures the crisis results from problems in the resource base and it is unlikely we will again see the golden years of prosperity which we have experienced in recent decades.
If this is the case, then austerity is something which will be forced upon us and we should try to cope with it with as little human suffering as possible.
I figure the basic economic problem is that while we have lots of energy and mineral resources left in and on the surface of the planet we have used up the most easily accessible. Those that are left take so much energy to extract it is becoming less feasible to do so. Suppose that during the age of prosperity we were able to build an automobile with 1,000 units of energy and labour and suppose it now takes 2,000 units to build the same car. Not only is this going to double the real cost of building a car it will probably limit the number of cars that can be built. It will certainly limit the number of people who will be able to afford them.
If this is a correct analysis of the problem, then clearly we need to make some revolutionary changes in the way in which we organize ourselves to produce and exchange goods and services. I predict there is little likelihood of the revolution starting until the economic crisis hits pensioners. For the time being it is mostly young people who are hurting.
There is a need to rethink our commitment to economic growth and rearrange our economy so we take advantage of modern technology so that most of us can live comfortably without having a job.
What disturbs me about austerity is that the people who promote it have so little compassion and understanding for those who have been caught by the crisis. Many of those who vote for politicians pushing austerity need to rethink their votes as it could be only a matter of time before they too will find their comfortable lifestyle being challenged,
Austerity with compassion should include some sort of income support. This blogger would like to see a guaranteed annual income scheme combined with changes in the way in which we create money. However, the need is so great I will say we need anything that will provide everyone with a more or less equal share of the goods and services we are capable of producing.
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