The constant call, primarily by Republicans in Congress, for drastic spending reductions in order to eliminate the federal budget deficit within ten years without further increasing tax revenues seems to have hit a snag recently. The work of Harvard economists Reinhard and Rogoff turns out to have included serious errors which cast the validity of their conclusions, used widely by those seeking to institute such austerity policies in this country in great doubt.
In order to reach these spending reductions, the policy-makers sought to deeply cut social programs and worker benefits that were helping those affected most negatively by the recession and high levels of unemployment experienced after the financial and housing bubble crashes. Similar policies have been likewise pursued in many European countries, which slashed social programs in an effort to get their debt situation under control.
The policies have been criticized both here and abroad by economists who…
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