Austerity: The Big Lie

Now, my bet is that, having read that sentence, you have one of two thoughts: Yes, we are moving past all this austerity! Or you thought: What austerity?

I’ll tell you now it’s the latter; we’ve had no austerity in America. But that’s not the point.

The Los Angeles Times, which I once held in high regard, reported that the budget “completes Obama’s shift from years of grim economic forecasts and austerity cuts” as though that were a factual statement. (Spoiler alert: It’s not. It’s journalist sloth passing for conventional wisdom that, apparently, needs no fact-checking because, clearly, the president must be right since he used the term “austerity” six times.)

Not sure about you, but I never felt or saw any notable austerity in America in recent years. So, I went to the source itself — the White House documents that show the history of America’s budget. Here are the numbers (2015 and 2016 estimates based on what’s likely to be spent by the time fiscal 2015 ends in September and, for 2016, Obama’s proposal).

Wow! Between 2011 and 2013 we slightly trimmed spending by the combined equivalent of $4.12 on a $100 meal — and that was part of the big sequestration battles in D.C. that trimmed a little here and a little there. The military didn’t get a few airplanes. NASA and the National Science Foundation lost a bit of funding. And the State Department had to scale back some of its diplomatic functions … oh, the austere pain in serving lobster rather than caviar to the Crown Prince of the Moldovanian Republic of Wherever.

The insignificant cutbacks that happened in D.C. between 2011 and 2013 — the supposed austerity — certainly caused no pain (except, maybe, for State Department diplomats forced to scale back some social excesses). Still, the minions who bend over like harlots in front of Keynesian theory seek to misshape public opinion to the contrary. They fabricate “facts” from whole cloth to scare us into a perspective that is wholly inaccurate.

The New York Times’ resident Keynesian, Paul Krugman, warned the “austerity” of 2013 would result in 700,000 lost jobs, while the perennially inaccurate International Monetary Fund said it would lower U.S. projected GDP growth to 1.5% for 2013 because of these cuts. For the record, the U.S. job market, as crappy as many of those jobs were, grew by more than 2.3 million in 2013, and the U.S. economy expanded by 3.4%.

So be aware of the spin that politicians and the media throw your way. Listening to them slowly and insidiously warps your beliefs. Without ever realizing it, you come to base perceptions of the economy, your own life and the investment decisions you make — maybe even your vote — on a reality that never existed.

Until next time, stay Sovereign …