The specific analogy isn't particularly apt, but the general point of the article stands. When you have crushing unemployment and an income crisis, the solution is not to make further deep cuts in the misguided pursuit of austerity. You should be promoting growth, first and foremost.
I know HN has a libertarian, small-government bent, but there's a reason public spending is included in GDP: it's expansionary. The government pays people to do things, then those people buy things. This spurs growth. As with many things, it's a spectrum and going too far in either direction (austerity v. public ownership of economy) is a bad thing.
What is clear is that, when you have a quarter of your country out of work and fully half your future workforce untrained and non-contributing, you don't further reduce the consumptive power of your population. Unpopular an idea though it may be in these parts, Keynesian economics works in regards to recovering from recessions and depressions; disciples of the Austrian School have yet to show any ability to do so and their policies look set to spell the end of the Euro.
The private sector is fundamentally better and healthier in the long run for a nation's economy than its public counterpart, but when the private sector is depressed and getting worse through negative feedback loops, the public sector has to step in. It's the growth driver of last resort.
Public (gov't) spending "counts" in GDP, not because it's "expansionary", but because it's an expenditure on final goods and services. Even if government spending was contractionary, it would count towards GDP. That's just how GDP works.
Likewise, there are reasonable arguments that government spending is/can-be contractionary. (I won't try to show that such spending _is_ contractionary, just that it may be).
All that needs to happen for it to be contractionary is for each dollar of government spending to reduce (crowd out) private spending and/or investment by more than a dollar. Harvard economist Robert J. Barro has been arguing this is the case.
Even if I grant all of your points theoretically, there are no real-world examples to back them up.
Libertarian (by way of Austrian) economics failed in this recession. Period. That's not to say that they don't lead to greater growth in the good times, but when the chips are down you want Keynes. You want large government intervention. Every successful recovery has rested on this principle, and every policy in opposition to it looks set to fail.
A rational government would apply the appropriate models in the correct situations; we are, unfortunately, stuck with self-serving idiots.
I know HN has a libertarian, small-government bent, but there's a reason public spending is included in GDP: it's expansionary. The government pays people to do things, then those people buy things. This spurs growth. As with many things, it's a spectrum and going too far in either direction (austerity v. public ownership of economy) is a bad thing.
What is clear is that, when you have a quarter of your country out of work and fully half your future workforce untrained and non-contributing, you don't further reduce the consumptive power of your population. Unpopular an idea though it may be in these parts, Keynesian economics works in regards to recovering from recessions and depressions; disciples of the Austrian School have yet to show any ability to do so and their policies look set to spell the end of the Euro.
The private sector is fundamentally better and healthier in the long run for a nation's economy than its public counterpart, but when the private sector is depressed and getting worse through negative feedback loops, the public sector has to step in. It's the growth driver of last resort.