YES, AUSTERITY SUCKS

And both the CBO and the IMFadmit it.  Speaking before the catfood supercommitte, Doug Elmendorf, the CBO chief, said the Baggers are WRONG:

“If policymakers wanted to achieve both a short-term economic boost and medium- and long-term fiscal sustainability,” Elmendorf said, the “most effective” policy would be “changes in taxes and spending that would widen the deficit now but narrow it later in the decade.”

Paul Krugman has been pointing that out for a while and now provides us with a neat graph from an IMF study on the likely effect of a Bagger Budget:

For years I've read that the IMF's austerity policies have hurt countries and Steve Benen reports that the IMF now admits it:

In a new paper for the International Monetary Fund, Laurence Ball, Daniel Leigh and Prakash Lounani look at 173 episodes of fiscal austerity over the past 30 years — with the average deficit cut amounting to 1 percent of GDP.

Their verdict? Austerity “lowers incomes in the short term, with wage-earners taking more of a hit than others; it also raises unemployment, particularly long-term unemployment.”

More specifically, an austerity program that curbs the deficit by 1 percent of GDP reduces real incomes by about 0.6 percent and raises unemployment by almost 0.5 percentage points. Typically, income and employment don’t fully recover even five years after the austerity program is put in place, the paper said.