For four long years after the recession officially ended, conservative austerity policies have sabotaged America’s economic recovery, condemning millions of Americans to unemployment and poverty. And in Europe, the same policy regime of spending cuts aimed at deficit reduction has thrown most of the continent back into recession.

Austerity has been intellectually discredited in recent months. But conservative spending cuts still dominate policy. And last week’s jobs report shows public sector layoffs are still a serious drag on the U.S. economy.

Economists at the Political Economy Research Institute found fundamental flaws in the work of Harvard’s Carmen Reinhart and Kenneth Rogoff – up until then conservatives’ best case for austerity. But, despite this intellectual victory, sequestration still cripples our recovery.

Officials at the IMF and the World Bank admitted their demands for more austerity in Europe had been misguided. But German bankers are still imposing severe budget cuts as the price for financing the debts of southern European countries.

The Center for American Progress, previously strong supporters of President Obama’s search for a deficit reduction “grand bargain,” came out against austerity as having harmed U.S. and European growth and called for a policy “reset” rejecting further spending cuts. But in September or October, conservatives in Congress are getting ready to hold the world economy for ransom by (once again) refusing to raise America’s debt limit until the president agrees to another round of damaging spending cuts.
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