Chart of the Day: Austerity Politics

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

So what happens if we tighten our belts and cut back on spending, as Republicans unanimously want us to do? A new IMF study estimates the effect of a cutback equal to 1% of GDP, which amounts to about $150 billion in the U.S. According to both the GOP leadership and its crew of presidential candidates, this would be peanuts, a mere down payment on serious budget cutting.

And maybe so. Unfortunately, as the chart below shows, a cutback of that size would lead to lower incomes and dramatically higher unemployment. But wait! There’s more! The IMF study says the effect is twice as big as the one in Chart 2 when central banks can’t cut interest rates. And guess what? The Fed already has interest rates at zero. They can’t cut them any further.

In other words, the GOP’s version of belt-tightening would probably jack up unemployment rates by nearly a full point. Welcome to Rick Perry’s America. (Via Brad Plumer.)

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We've never been very good at being conservative.

And usually, that serves us well in doing the ambitious, hard-hitting journalism that you turn to Mother Jones for. But it also means we can't afford to come up short when it comes to scratching together the funds it takes to keep our team firing on all cylinders, and the truth is, we finished our budgeting cycle on June 30 about $100,000 short of our online goal.

This is no time to come up short. It's time to fight like hell, as our namesake would tell us to do, for a democracy where minority rule cannot impose an extreme agenda, where facts matter, and where accountability has a chance at the polls and in the press. If you value our reporting and you can right now, please help us dig out of the $100,000 hole we're starting our new budgeting cycle in with an always-needed and always-appreciated donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate