A group of financial capitalists, represented primarily, but not exclusively by the Republican Party, looted the banking system in 2008/2009 and caused the Great Recession costing millions of people their jobs and their homes. Now the same people are set upon doing it all again. The all cuts budget imposed by the Republicans will make the recession longer and worse than it needs to be.
Meanwhile, Back in the Real Economy N.Y. Times. Opinion. July 30,2011.
The economy is in trouble, and Washington — fixated on budget slashing at a time when the economy needs more spending — seems determined to make matters worse.
…Indeed, they are bound to worsen if Congress approves deep near-term spending cuts as part of a debt-limit deal while letting relief and recovery measures expire.
We will leave it to the historians to figure out how both political parties, and many Americans, became convinced that austerity is the road to recovery. History provides evidence that it is not, including the premature budget tightening of 1937 that reignited the Depression.
For now, it is clear that the traditional drivers of recovery — consumer spending and residential real estate — have failed to rebound, with the latest report showing consumers extremely cautious about spending on anything and the housing market stuck at its post-bubble lows.
Weak demand leads to slow growth, and slow growth leads to high and rising unemployment, which then reinforces weak demand and slow growth, and so on, in a vicious cycle from which the economy, obviously, has found no escape.