One of the grand lies that conservatives like to tell Americans is that “We’re becoming just like Greece.”  Without going into a lot of economic detail here, if you believe the MMT economists are right (I do), there is no possible way for America to “go broke” in the way Greece might.  This principle stems from the nature of sovereign fiat currency like the US Dollar.  Any nation where the government is the monopoly producer of currency cannot “go broke.”  Wisconsin, on the other hand, is not so lucky.

Governor Walker’s rejection of various bits of stimulus funds (HSR for instance), while ideologically pleasing to his Tea Party base, may serve to push Wisconsin closer to the Greek outcome.  Why?  Because Wisconsin does not control the currency in the same way that Greece doesn’t control their currency.  Both are beholden to the monetary policies of the sovereign that produces the currency (Washington, DC for Wisconsin and a de facto Berlin for Greece).  Without monetary policy to help drive GDP growth, only fiscal policy is available.  Those kinds of capital inflows are important to help stimulate demand when the private sector is struggling.  And rejecting the additional influx of money from the Federal government, Governor Walker has made it that much harder for Wisconsin to recover.

Greece may serve as a warning for Wisconsin if we don’t do something to move our economy forward.

The year that followed [the implementation of austerity measures] brought one of the most drastic drops in living standards that post-war Europe has seen. Workers and the retired alike have lost around a third of their incomes. Wage arrears in the private sector have now reached three months on average, while public-sector pensions—around €500 to €700 a month—are in many cases not being paid at all. Public services are in a state of collapse: schools are without textbooks, bringing teaching to a virtual halt, while hospital patients are being told to buy their own medication from pharmacies. The suicide rate, traditionally one of the lowest in Europe, has increased by 40 per cent in just one year, and the health of the population is deteriorating dramatically. [4] The actual unemployment rate is said to be around 25 per cent (the official rate is 18.5 per cent), with the figure twice as high among 15-to-24-year-olds, while GDP has declined by at least 12 per cent since the start of the crisis, a proportional drop comparable to the effect of the 1930s Depression.

Expansionary austerity is, and always will be, a myth.

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