WASHINGTON - The White House is announcing members of Puerto Rico's fiscal oversight board established as part of legislation to address the US territory’s debt crisis. President Obama signed the Puerto Rico Oversight, Management and Economic Stability Act into law June 29. The board is responsible for triggering debt restructuring on the island and approving the Governor's budget. Four of the seven board members are Puerto Rican.
Number of Oversight Board Members: 7
Number of members from the Elite Ruling Class: 7
Number of members from the working class: 0
Any questions on how this will turn out?
Quite obviously the common Puerto Rican worker has been living off of gov't largesse for far too long and has to pay his fair share now. Austerity is the only realistic answer!
Yes but austerity has not worked yet when it has been used since the Great Recession started. All we have seen is a speeding up of the worst inequality in pay and wealth worse than in the Robber Baron Era.
What we have is privatization of profit and socialization of externalities (costs).
" We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity, particularly with regard to spending, imposed by Republican policymakers, members of Congress primarily but also legislators and governors at the state level." By
Josh Bivens • August 11, 2016 in Why is recovery taking so long—and who’s to blame?
Josh Bivens continues "Since the recovery’s trough in June 2009, employment took longer (51 months) to reach its pre-recession peak than in any other of the previous three recoveries. Much of this too-slow march back to the pre-recession employment peak can be attributed to the length and severity of the Great Recession itself—the economy had a much larger hole to dig out of. But the pace of job growth in the recovery phase following the recession was also slow relative to previous recoveries—slower than any on record except the recovery in the early 2000s. At the trough of the Great Recession the economy was more damaged than at the trough of any postwar business cycle; only the 1982 trough was comparable."
And "Given the degree of damage inflicted by the Great Recession and the restricted ability of monetary policy to aid recovery, historically expansionary fiscal policy was required to return the U.S. economy to full health. But this government spending not only failed to rise fast enough to spur a rapid recovery, it outright contracted, and this policy choice fully explains why the economy is only partially recovered from the Great Recession a full seven years after its official end."
And "The recession that began in December 2007 and ended in June 2009 was the longest in postwar history. Its cause was the same as that of every other postwar recession—a deficiency of aggregate demand, meaning that the spending of households, businesses, and governments was not sufficient to keep the economy’s resources fully employed. In the case of the Great Recession, the demand shortfall was enormous, and it developed suddenly when the multitrillion-dollar bubble in real estate burst.
Whatever the source of demand shortfall in a recession, the policy remedy is always the same: boost aggregate demand. In terms of monetary policy, this means that the Federal Reserve cuts interest rates to spur borrowing and hence spending. For fiscal policy, this means either a temporary burst of spending by government and/or tax cuts to spur spending by consumers. Some of the temporary burst is automatic and happens without new legislation: Unemployment insurance and food stamps, for example, rise automatically when recessions hit. But sometimes, as with the Economic Stimulus Act of 2008 signed by George W. Bush and the American Recovery and Reinvestment Act (ARRA) of 2009 signed by Barack Obama, the temporary stimulus is legislated.
Taking this argument to its logical conclusion, the sluggishness of the current recovery arises from a prolonged failure to fill the gap between aggregate demand and the economy’s potential output. Figure A shows payroll employment growth following the trough of the most recent four recessions.1The pre-recession employment peak is shown at the start of each line. The employment recovery from the trough to the pre-recession peak takes successively longer in each new business cycle: 11 months in the early 1980s, 23 months in the early 1990s, 39 months in the early 2000s, and 51 months following the Great Recession."
Josh Bivens used:
Bureau of Economic Analysis (BEA). National Income and Product Accounts interactive data. http://bea.gov/iTable/index_nipa.cfm.
McNichol, Elizabeth. 2016. “It’s Time for States to Invest in Infrastructure.” Policy Futures Report. Center for Budget and Policy Priorities.
Oh, I feel bad now because I was being snarky. I don't actually think that austerity is the answer, or that workers have been pampered. I agree compeletely that in a recession it's necesarry to increase aggregate demand. Sorry that you took so much time to respond.