The great austerity shell game

Here's how the capitalist scam works: let government borrow for crisis bailouts, then insist cuts pay for them. Guess who loses

Richard Wolff
theguardian.com, Monday 4 November 2013 08.00 EST


Center-right governments in Britain and Germany do it. So do the center-left governments in France and Italy. Obama and the Republicans do it, too. They all impose "austerity" programs on their economies as necessary to exit the crisis afflicting them all since 2007. Politicians and economists impose austerity now much as doctors once stuck mustard plasters on the skins of the sick.

Austerity policies presume that the chief economic problems today are government budget deficits that increase national debts. Austerity policies solve those problems mainly by cutting government spending, and secondarily, by limited tax increases. Reducing expenditures while raising revenues does cut governments' deficits and their needs to borrow.