New Economic Perspectives has this great article Debt Derangement Syndrome: Saving Our Grandkids from Wall Street by William K. Black.
The article is loaded with facts instead of ideology. It may be too much to read for people who are not that interested in how the macro-economy of a country like the USA works.
There is one point that Black makes that I feel is not emphasized enough. When written in normal text, people tend to pass over the small words that are so important. So I will attempt to quote it, but add some typographical emphasis to make the point.
Austerity, when inflation is already too low, when many millions have dropped out of the labor markets, when there are no real resource constraints to stimulus, and interest rates are often negative is a dogmatic act of economic malpractice.
This statement about austerity is true only when the conditions that Black specifies are true, all of them, even the ones I didn’t emphasize. You cannot logically refute what he says about austerity by using his words and leave out the conditions to show that austerity under completely different circumstances is good. Not only would you not be proving anything by applying his words when the specified conditions do not hold, but that act would equally be economic malpractice.
So let us state the contrapositive to Black’s prescription.
Not to use austerity, when inflation is already too high, when many millions in the labor markets are already working enormous amounts of overtime, when there are real resource constraints to stimulus, and interest rates are often high is a dogmatic act of economic malpractice.
The above is exactly what the Republicans and corporate Democrats are doing when they say during an overheated economy that we must stimulate it even more. When resources are in short supply (during an oil shortage), or when inflation is high, or when labor is in short supply, then tax cuts, and other economic stimulus is exactly the wrong medicine.
I don’t want to hear any more proposals to use the wrong economic medicine at exactly the time when it will do the most harm. Jill Stein understands this, Bernie Sanders sort of understood this. Neither Donald Trump nor Hillary Clinton nor Gary Johnson want to admit to having a clue about this.