The International Monetary Fund (IMF) has come out against the big-bank, unrestricted free market capitalism that Republicans have been shamelessly promoting ever since the Reagan era. The IMF has been a big supporter of private free markets, free trade, low national deficits/debt (austerity) and deregulated markets, including financial markets. However, when even the vaguely neo-colonial IMF have concluded that there is such a thing as too much deregulation, and too much austerity, you know something is terribly wrong.
Republican economics claims that deregulation and fiscal austerity lead to optimal economic growth, but research by the IMF has found that this is a false and fundamentally unproductive policy. They have published an article explaining that “the benefits [of these economic policies] in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.” Worse, there are significant costs. The Republican economic agenda leads to increased income inequality. Not only is socioeconomic inequality an egregious injustice to the middle and working classes who keep their countries’ economies afloat, it turns out that inequality actually hinders growth. The IMFs findings are damning to the Republican agenda, which has spent its time, and large sums of money, convincing the working class that they will be better off in a society run by big money and big banks.
Since the Great Recession and Occupy Wall Street movement, Americans have been realizing the tragic extent of socioeconomic inequality, and the lack of social mobility that puts “the American Dream” out of reach for most Americans. The Republican party has been feeding America a line that spending cuts and deregulation will increase growth and eventually help the poor, working, and middle classes. We now have good evidence that these policies will not bring the growth they promise, first by watching social mobility in America decline since the Reagan-era, and now from the IMF’s rigorous research. The IMF does note that capitalism does have benefits and when practiced correctly can lead to growth and pull people out of poverty. However, blindly deregulating and practicing fiscal austerity leads to devastating costs in terms of inequality, and sabotages growth.
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