Dean Baker: Budget austerity proved a joke, but the US and Europe won't change course

The US and European economies need government spending to boost jobs, but sanity isn't winning in politics today

It appears that the Reinhart-Rogoff battles over their faulty data about government debt have flamed out. Even the inventors of the 90% debt cliff are now anxious to portray themselves of cautious supporters of expansionary fiscal policy. This should mean that sober policy types everywhere can turn to the immediate problem of reducing unemployment with more expansionary fiscal policy.

Unfortunately, this does not appear likely to happen. Even though the case against fiscal policy has been blown to smithereens, there is little impulse in the United States or Europe to change course. The counter-argument appears to have two sides. First, growth has picked up so that we don't really need it. Second, we really wouldn't know what to spend money on in any case.

Neither of these arguments deserves to be taken seriously on its merits. But they nonetheless must be taken seriously because of the prominence of the people who say them.