Why Austerity?

Suddenly it seems to be all the rage.  There’s just one problem. If you actually wanted to try to prolong a recession you couldn’t do much better than imposing austerity.  Well maybe having a nuclear war would be better, but I digress. It hasn’t worked. It has never worked to bring us out of a recession or depression.

In a nutshell, here’s the problem.

The Government cuts back spending.  Now, some people will tell you about welfare mothers (usually without much in teh way of documentaion) roads to nowhere, or expensive military projects.  Which is good, except that is all examples of money that is going to employ people either directly (by employing them) or indirectly (by employing the people who clean their offices, build their roads, and deliver pizza).  Even better, there are very few jobs in teh government that can be considered truly “rich” upper class? Yeah. More usually middle class– and both those classes tend to put a lot of their money into the economy. Unlike the povertry stricken, they have money to spend, unliek the mega wealthy, they have other things to buy than super luxuries and don’t tend to stick it all into investments. In other words, the money goes back into the economy.

Fine, so Austerity hits, and those leeches on the public purse are sent packing.

Where do they go?  Well, in good times, probably to jobs in the public sector– that’s why austerity isn’t so bad in good times.

In case you haven’t noticed it’s not good times.  So they go…to the unemployment line.  Where they take money, but no longer produce anything and even better, can’t buy very much.

Now this trickles down. If you’re poor you don’t go on vacations– tough luck hotel clerk. You don’t buy as much pizza– so long delivery boy.  You don’t buy as much gas, etc, etc, etc. It has a ripple effect throughout the entire economy…

Which comes back as less in the way of tax revenues, so after this glorious move against waste, the government…

… Is worse off than it was before.

I wish this was a bad joke, but right now the people in charge aren’t simply driving for a cliff, they’ve got the accelerator pressed down against the fire wall.