In recent weeks I’ve been focusing in on the fact that budget cuts and austerity only worsens an economic crisis and a budget mess, never solving it. (And yes, it is a fact – just ask the Irish).

The logic is simple: in a recession, government has to step in to provide the basis of economic recovery by spending money the private sector can’t or won’t spend. It’s amazing to me that we even have to have that remedial discussion, after we learned this in the 1930s, but here we are.

It is especially true of a balance sheet recession, when the private sector is overly indebted and is seeking to purge that debt – requiring the government to step in and provide stimulus and funds to help people get rid of the debt without dragging down economic activity. This phenomenon is exactly what we’re seeing happen right now – in May the savings rate grew but consumer spending did not, as consumers seek to purge debt. Without more government spending, this phenomenon will continue and retard economic recovery.

Paul Krugman has already argued that the slide of global policymakers into neo-Hooverism will produce an outright Depression. Here in California, three straight years of austerity and budget cuts have produced persistent budget deficits and record unemployment while destroying the foundations of economic recovery.

Those of us who have consistently argued against budget cuts now have an ally in the US Federal Reserve – specifically in the San Francisco branch. Two SF Fed economists wrote that more state and local budget cuts would reduce GDP:

The current fiscal crises that most states are facing are generally the result of a severe macroeconomic downturn combined with a limited ability of the states to respond to such shocks. States are facing increased demand for public services at the same time revenue is falling. Federal stimulus support for state budgets is winding down over the next two years. Rainy-day funds are all but exhausted. Thus, state fiscal crises aren’t likely to go away soon and will probably get worse before they get better. The solutions states employ to close projected budget gaps will have painful effects on state residents and businesses but pose a more modest risk to the national recovery. Historically, the health of the national economy determines the health of state finances, not the other way around. Sustained improvement in the national economy is essential for states to grow their way out of their current problems and improve their fiscal conditions.

And as econ blog Calculated Risk reports, Moody’s put a number to the impact of state and local budget cuts – that it would shave 0.25% off of GDP in both 2010 and 2011.

We can’t afford more budget cuts. Economic recovery must be the top priority of policymakers in Sacramento, who oversee roughly a seventh of the overall US economy. Yet Republicans continue to demand further and deeper recession as the price of their vote for a budget.

It’s time for Democrats to resist the calls for further cuts. Government needs to start spending more money, not less, and that argument has a lot of intellectual weight behind it.

It’s also time for California’s political reporters to pay attention to what may well be the story of the young century in California – how austerity destroyed the state’s economic recovery and prolonged the worst recession in 60 years. The public deserves to know that the budget cutting mania exhibited the last few years has been a colossal failure.