Lessons from Greece

Education is simply learning from the experience of others. So it’s not surprising that the Republican base includes so many uneducated voters. These people are like toddlers who have to learn for themselves that playing with fire can be painful.

But surely the party’s leaders know better? Apparently not.

They seem to have learned nothing from the economic horrors suffered by European countries that adopted austerity. They stubbornly cling to the idea that the path to prosperity is a balanced budget. And they are prepared to inflict the most dire suffering on their country in order to achieve this goal.

No corporation would handcuff itself by refusing to borrow money. Borrowing money to expand is quite normal in the business world.

Of course, to succeed, companies must use the borrowed money wisely. They must earn enough to repay their debts and have something left over to share with stockholders.

Austerity economics must inevitably fail because less investment brings in reduced earnings and that means even less investment … and so on.

In politics, there’s also the public’s reaction to consider. Voters will not put up with deprivation for any length of time. They will turn against politicians who inflict suffering on them and their families. Eventually, even the most uneducated voters will catch on.

The recent Greek elections provide a dramatic example of this. Greek voters rejected the austerity they have endured for the past five years.

They were evidently sick of the spending cuts and tax increases imposed by an international bailout. And austerity not only brought them personal misery, it just wasn’t working.

In a recent New York Times column, Nobel Prize-winning economist Paul Krugman (above) explains that as Greece slashed public services and cut back on wages and social benefits, the country’s revenues plummeted and unemployment soared.

Yet, on this side of the Atlantic, politicians continued to advocate the same belt tightening policies that were failing in Greece.

Will the new Republican Congress see the light and work with President Obama on infrastructure, education, equal pay for women, raising the minimum wage and other positive programs?

Or will it be up to the voters to reject austerity when they go to the polls next year?

Click for Krugman’s column.