Tuesday, November 16, 2010

The Deficit Delusion

Just read this disheartening story from the BBC about budget cuts for the Tyne and Wear Fire Brigade. The same thing is happening in many American localities as local governments are forced to cut back on essential services. Cuts by States and local governments are a kind of "stealth austerity." They tend to pass under the national radar which is largely concentrated on Washington.

What is interesting about all the talk about deficits and the need for austerity is the fact that not too many people see to care much about it, as Paul Krugman shows in this blog post.While the deficit is a long-term problem, the best way to deal with it is to grow out of the current deflationary slump, not make it worse by cutting more jobs which will only further dampen demand and prolong the suffering of millions of people.

4 comments:

  1. Newcastle, the main city in Tyne and Wear, is my hometown so I am sad to hear this news.

    Sad but not surprised.

    While listening to British radio I heard a live broadcast from a protest in London-- every fire brigade in the country is coming together to fight any cuts so hopefully local cuts will become national issues and won't slip under the radar.

    PS: One of the firemen on the radio made an interesting point-- cuts to the fire service affect the poorer more than others. The exact connection between poverty and fire-risk escapes me but I believe he is right.

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  2. Hi Czarny Kot,

    I am glad to hear that people in Great Britain are protesting these cuts. Here in the United States, people tend to just take the punishment, although that may be changing.

    With regard to poverty and fire risk, I imagine many poorer people live in older housing where there may be more risk of fire. Poorer people may also live in more densely populated areas where fire may spread more easily from house to house. In my own home city, I notice that most fires do indeed seem to occur in the poorer neighborhoods.

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  3. That explanation makes sense in America but in the UK middle-class people often live in old, terraced housing.

    Of course, it is old but well-maintained terraced housing and the electric wiring is often shoddier in hastily built 60's housing.

    If the local TV news in Newcastle is a reliable guide then chip pans (making fries at home) cigarettes and arson are the 3 main causes of house fires.

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  4. Good points about cooking, smoking, and arson. My father used to smoke and I was always worried he’d fall asleep and set himself or the house on fire.

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