We are living in the age of Austerity, cliche to say, but it is true, but is it working? There’s nothing wrong with balancing the governments budgets and working towards eliminating deficits, however, is it improving our Western economies, or is Austerity really what people on the left say, a useful cover to gut the poor of their social security nets and to transfer even more wealth to the top tiers of society.
Is the word even helpful to use?
What establishment pundits bill as “austerity” is higher government spending and higher taxes. No it isn’t working. Lowering government spending and lowering taxes will work.
Whut?
I think the main problem here is that the parameters is off, causing the system to work towards the wrong goal. The overall goal of almost all economies today is simply to increase the amount of economical transactions within its’ administrative area. This is a very clumsy goal, which is both unsustainable and leads to bad priorities. The economy is basically only working to make itself bigger and more active, nor better or more effective. The result is that it’s basically a race to see how fast you can turn a natural resource into pollution.
Is it? Do we even have a clear definition of “austerity”? You mentioned balanced budgets. How many industrialized countries have balanced budgets right now?
From what I’ve seen, WillFarnaby is correct. A country (USA, Britain, France) raises taxes and increases government spending. Then Paul Krugman writes a book or article explaining that said country is suffering from “austerity” because of huge, relentless cuts to government spending. But where are those cuts to government spending, long-term? Certainly not in Britain. Certainly not in the United States.
I thought it was higher taxes and lower spending.
Speaking generally, the austere nations are not doing very well. But how much we blame that on austerity is a direct relationship to whether we are fiscally liberal or fiscally conservative.
I, for one, think that cutting spending is a small component of a much-larger-needed set of economic reforms, of which the nations forced into austerity are evidently quite laggard to implement.
That’s what they claim, but government expenditures have been increasing steadily if it is indeed the age of austerity (the op does not allow debate on this point), austerity is characterized as higher spending and higher taxes.
Who says this, and what do they mean by it? And who is the “we” who are supposedly living in this “age of Austerity”?
When I look at all of American history (just to pick a country), it seems very odd indeed to single out the present as “the age of Austerity.”
I think that some countries have actually done lower spending and higher taxes – I wonder if this has worked.
Austerity is a package of reforms – higher taxes, lower public spending, tightened credit, and structural changes to sustain the package. It is imposed on countries like Greece which had become spendthrift and heavily in debt. Many claim that organizations like IMF impose austerity on countries in trouble to help banks and other creditors get their loans repaid, rather than to actually help the country in trouble. As evidence for this claim, consider Malaysia during the great Asian contraction of 1998. Malaysia refused the offers of IMF help in return for austerity, and went on to outperform the economies which accepted such “help.”
While “austerity” was originally targetted at underdeveloped countries which were abusing easy credit, massive government stimuli in the wake of the Great Credit Crisis of 2008 made all the developed countries seem “spendthrift”, and a right-wing reaction was to impose austerity. Yes, such austerity will strongly favor vested interests at the expense of the lower classes. Most economists, OTOH, agree that continued deficits are appropriate until the economies regain their footing. Obviously it’s too bad that the Cheney-Rove Administration ignored the Fable of the Grasshopper and the Ant, and let the U.S. accumulate record government debt during the 2000’s boom.
Assuming you know what austerity means, you’ve left off at least one NOT in this post. The Board offers a 5-minute window to review and edit your post; I suggest you avail yourself of this feature in future.
Okay, so we have a definition of austerity: “higher taxes, lower public spending, tightened credit”. We also have an assertion that right-wingers imposed austerity in “all the developed countries”.
I presume you agree that the US and Britain are developed countries. The US has certainly raised taxes, I’ll grant you that. Has it cut public spending or tightened credit? I’m pretty sure the US has done the exact opposite, raising spending and having the Federal Reserve print vast amounts of money. In fact I’ve already provided a cite for the spending part. Likewise for Britain. Where are these supposed spending cuts?
You seem to have proved Will Farnaby’s point: certain people say we’re having austerity, and say that public spending has been reduced. In reality, public spending has increased.
Governments in Europe and North America still run enormous budget deficits. How is that austerity?
Real austerity would probably entail not merely running a balanced budget, but in fact actually running a surplus comparable to a typical budget deficit – that is, in the sum of hundreds of billions of dollars a year. By this definition, we haven’t had austerity in the states since Bill Clinton.
Who’s saying the the U.S. is in “austerity”? 
With loose credit and continued deficits, the U.S. is clearly not in “austerity.”
Nevertheless, ITRChampion’s claim that government spending is up is, at best, very misleading. Much of the U.S. government is operating under a sort of austerity. Even Federal programs where spending has increased somewhat – education and public assistance – have increased in large part to compensate for reduced spending by the states.
Over a 9-year period where Federal spending has increased about 1650 gigadollars; 350 gigadollars of increase was interest on the national debt, 260 gigadollars was for defense spending, and 840 gigadollars of increase was for ostensibly self-funded programs like Social Security and Medicare. Add in a 45 gigadollar increase of Food stamps and most of the higher spending is accounted for.
The demographic bump associated with pensions has been long noted; it is disingenous to suddenly blame this spending bump on liberal change. The so-called fiscal conservative would be first to shriek in distress if major defense cuts were proposed; and I’ll assume defaulting on bond interest is off the table for all but the Teabagging extremists.
So which profligate liberal spending do you seek to cut, Champion? Curbacks on food stamps, I suppose, since evidence mounts that some Welfare Mams are spending food stamps on meat, soy milk and catsup?
Your U.S. link shows only state and local spending, and only through 2009.
I found this chart of federal spending as a percent of GDP and, a few fluctuations aside, we’re right about where we’ve been for the last 40 years. It’s not the increase you suggested, and it’s on a downward trend since 2009.
Perhaps the person who posted this:
While “austerity” was originally targetted at underdeveloped countries which were abusing easy credit, massive government stimuli in the wake of the Great Credit Crisis of 2008 made all the developed countries seem “spendthrift”, and a right-wing reaction was to impose austerity.
Also the OP who posted this:
We are living in the age of Austerity, cliche to say, but it is true,
And a gazillion pundits who have similarly acted like it’s an obvious, indisputable fact that the American government functions under austerity.
Do you bother checking whether anything you post is true? Do you even care?
Here’s a nice set of charts showing total state spending in various categories since 2000:
Education spending has increased every single year by a lot. Your claim of reduced spending by states is flat wrong. Welfare by the states spiked during the recession and tapered a bit when the recession ended, but it’s higher now than in 2008. Overall spending by states is up since the recession. The states have not reduced their spending.
Public spending increasing means nothing - the deficit is what is important. However, I do agree with you that on the federal level we have not been pursuing a policy of austerity - much to the dismay of the right. How has it worked?
Here.
Deficits have decline from 10% of GDP in 2009 to 2.5% projected in 2016. So our non-austerity policy has worked pretty well. However austerity policies in Europe have led to double dip recessions and high unemployment,
Spanish unemployment is 22% thanks to austerity. (Cite.)
Why does austerity fail? If cutting stimulus when needed from a recession leads to high unemployment and reduced growth, tax revenues are going to fall faster than spending can be cut, and you find yourself in worse shape than before, as is the case in Greece. Why does California have a budget surplus? Not from cutting spending. Some if from a tax increase, but most if from our improved economy.
Austerity is a catch all phrase. But yes removing unnecessary bureaucracy, combatting monopolies, easing labour policies (making it easier to fire people), removing absurd perks of government workers, lowering taxes, etc. all such help the economy.
“Lowering taxes” doesn’t necessarily help the economy, no. It helps if the tax is too high. It does not help if it isn’t.