Open thread for night owls: Ways the austerity obsession in Washington could cost you your job

Bob Borosage of the Campaign for America's future writes Ways the austerity obsession in Washington could cost you your job:

The U.S. economy shrank unexpectedly in the last three months of 2012, ending over 30 months of economic growth. Exports lagged, in part because of declining markets in Europe, now suffering a continued recession inflicted by misguided austerity policies. But the greatest cause of decline was unexpectedly large cuts in government spending, particularly in the military. Yes, Virginia, cutting government spending in a weak economy costs jobs. A three-month downturn is a caution, not a catastrophe. But Washington seems too wrapped in its deficit delusions to pay attention to the flashing yellow lights. Here's a cautionary guide. 1. Austerity costs jobs This economy is still sputtering. Over 20 million people are in need of full-time work. While corporate profits are at record heights as a percentage of the economy, wages are at record lows and falling. An alarmed Federal Reserve has kept interest rates close to zero. Housing prices have started to come back. But companies are cautious, looking for customers before they do much expansion. In these circumstances, cuts in government spending and hikes in taxes on working people cost jobs. Government workers and contractors get laid off. Small businesses feel the pinch as the afflicted tighten their belts. Interest rates can't go lower; business doesn't get any more confident. And as the last three months showed, it doesn't take much to push a slow growth economy into decline. 2. More austerity is already being inflicted Last quarter's decline took place before the tax hikes agreed to in December's "fiscal cliff" deal. The increase of tax rates on the top 1 percent will have little effect on demand, since someone making over $400,000 can afford the hit. But the end of the payroll tax holiday cost the typical family 2 percent of their income, with the change visible in their January paychecks. For a family earning $50,000, that represents a $1,000 loss of income'and will be felt. 3. Even more austerity soon to come House Republicans devoted their retreat to reordering the serial fiscal hostage taking they have planned for the next five months. The proper etiquette of hostage taking, they determined, begins with the threat of deep automatic cuts of military and domestic spending'the sequester'on March 1, then moves to the threat to shut down the government by the end of March, and finally to the threat to default on the national debts and shudder the global financial system in mid May. This reordering, they believe, gives them greater leverage to extort deep and unpopular cuts in spending, particularly Medicare, Medicaid and Social Security. The mainstream media hailed this as a sign of their new maturity. 4. The deficit hawks are delusional [...]

Read the rest of Borosage's article to see details of the harm that austerity is now causing and will cause in the future if it isn't halted.

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