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In economics, austerity refers to a policy of deficit-cutting by lowering spending via a reduction in the amount of benefits and public services provided.
The point of austerity is to cut government spending to get out of control state finances under control, not to jump start the economy. Why do liberals use economic growth as the standard when assessing the success of austerity measures? Everyone knows deep cuts to spending doesn't produce short term economic growth: that's not the point of austerity, though.
Greece has been on that path for 4 years now and each year brings a new emergency bailout with even tougher "austerity measures".
And they are no closer to recovery than they were 4 years ago.
You shouldn't have to ask when you have 4 years of data right in front of you..Europe.
That's not the point of austerity though. Did you read the OP? No one said austerity would lead to economic recovery, just that it would get government finances under control.
That's not the point of austerity though. Did you read the OP? No one said austerity would lead to economic recovery, just that it would get government finances under control.
That's a subscription only link but the news can be found on other sites.
Don't forget that their glowing deficit reports last September ended up being bogus after Germany uncovered that they underreported by 50% and demanded cuts to the true budget deficit if they wanted another IMF loan.
I'll wait for Germany to scrutinize this. Also noted in the article is that Greece is not counting state spending.
Iceland used an austerity prograqm that thus far has worked reasonable well.
Iceland has a population of about 325,000 people, not too far removed from an economy based on fish.
Iceland does not spend on defence nor does it have an army.
Iceland has a Nordic Welfare Program, including Universial Health Care for all.
The population in Iceland is about 200,000 less than the least populated state in the U.S.This is a likely contributer to why Iceland is one of the safest nations in the world. That 6 degrees of separation is likely 1 degree in Iceland.
The point of austerity is to cut government spending to get out of control state finances under control, not to jump start the economy. Why do liberals use economic growth as the standard when assessing the success of austerity measures? Everyone knows deep cuts to spending doesn't produce short term economic growth: that's not the point of austerity, though.
Oh! You mean the government!
And here I thought you meant having the rich become austere as opposed to continuing to be the ostentatious and corrupt plunderers, larcenists, embezzlers, and pilferers they are.
I don't think austerity is a bad idea but I don't think the time to do it is during a recession. If we want to increase taxes and decrease spending we should do it in a boom period. Paying down debt is extremely important but utilizing it in a period of economic turndown creates an entirely unnecessary problem. The deficit and our debt are problems right now but ultimately saying that we need to stifle our economy to pay down a debt "crisis" that we can't with definite certainty predict when will happen (or if it will happen) doesn't make tons of sense.
And here I thought you meant having the rich become austere as opposed to continuing to be the ostentatious and corrupt plunderers, larcenists, embezzlers, and pilferers they are.
The above is the liberal view of hard working, well to do citizens who have benefitted from their work, sacrifice, and education.
If someone is wealty, in the mind of a liberal, you had to have-
inherited
cheated
stolen
or stumbled your way into wealth. Given this "fact" the liberal is led to believe that they are not rich as they are-
honest
hard working
virtuous
and unlucky. When you rationalize failure in this fashion, it is easier to accept being a failure/loser, as it exhonerates you of any personal responsibility. Like in "Repo Man", society is to blame!
You're going about this backwards and you're confused about what the real problem is.
Our immediate problem is not the debt or the deficit, it is an economy still stuck in a depression caused primarily by inadequate aggregate demand. In the long term it will be important to address the debt, but not now.
Another way of asking your question, why austerity doesn't work, is to ask what the likely effects of adopting austerity measures would be, and the experience in Greece and the other European countries answers that: much government spending puts money in people's pockets and consequently supports demand. This in turn supports tax revenues.
Even conservatives recognize this at some level, and we can see this when we observe how eager they are to pump up military spending and to get it in their districts. Even here at CD Forum we have seen conservatives argue that cuts in the military budget would hurt the economy because they would put people out of work; and both here and in Congress we have seen conservatives argue that we shouldn't raise taxes during a recession, and it's not just because they never want to raise taxes, it is because they recognize that taking money out of the economy by reducing the deficit is not a good thing to do during a recession.
This is why you're missing the point by trying to exclude the stimulative properties of government spending from the discussion of whether austerity works. We have known for many years that countercyclical spending programs, like unemployment compensation, help the economy by putting money into people's pockets to spend, resulting in more economic activity and government revenue.
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