Posted on May 7, 2012
Let’s not kid ourselves. Austerity sucks.
It is not fun for anybody, especially politicians. And more especially, European politicians.
It is not fun for the average voter, the average dieter, the average public employee, the average retiree and the average teen-ager.
Austerity is simply not great fun.
But sometimes, it is necessary.
According to the dictionary, austerity means sternness or severity of manner or attitude or extreme plainness and simplicity of style or appearance.
No wonder Mr. Sarkozy lost.
Wikipedia says this about austerity: “In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to reduce their deficit spending while sometimes coupled with increases in taxes to pay back creditors to reduce debt. "Austerity" was named the word of the year by Merriam-Webster in 2010.”
Austerity is not good politics. Just ask Paul Krugman, who has been violently editorializing against the austerity policies of Angela Merkel and David Cameron for months (if not years).
In Krugman’s world view, priming the pump is the only option. We must spend, spend, spend, deficits and national debt be damned. Of course, if you are German, you have a different view of deficits out of control, because you know instinctively that out of control deficits lead to out of control inflation.
And that memory remains seared in the memories of many German bankers, who can think only of the financial troubles of the Weimar Republic which led to the rise of Adolph Hitler and the Third Reich.
The French and the Greeks, of course, don’t share the German love of fiscal austerity. And they are sick and tired of being bossed around by a bunch of Prussians in Frankfurt and Berlin. And that has led to some terrible strains within the European Union, strains that will inevitably lead to its collapse.
Some American politicians talk a good game of fiscal austerity, but they don’t really mean it. They understand the politics. Democrats are not going to cut spending. Republicans are not going to raise taxes.
The good news for the U.S. is that we now have gridlock, which means that spending will not increase too much and neither will taxes. We won’t have austerity, but we won’t have complete fiscal irresponsibility either. We will largely have the status quo, which hopefully will help us limp along to a recovery somewhere down the line.
Make no mistake. Austerity sucks. It may be necessary on occasion, but austerity is a real buzz kill.