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Austerity Should Be Renamed Sustainable Spending

Nov. 01, 2017 11:00 PM ET1 Comment
Bruce Wilds profile picture
Bruce Wilds

We would be far better off if the term austerity were replaced or renamed sustainable spending. An article that was published several months ago on Project Syndicate by James McCormack, titled "The Quiet Demise of Austerity," states the merits of austerity seem to have been forgotten just when it is needed again. In the article, he points out that debates about the potential advantages of using stimulus to boost short-term economic growth, or about the threat of government debt reaching such a level as to inhibit medium-term growth, have gone silent. It is possible that the problem with the general concept of austerity lies in the moniker we have chosen to use to describe it - we might have been better off calling it sustainable spending.

Austerity Is Often Seen As Heaping Misery On The Poor

The reason for this article is that Washington is currently putting together a tax bill promising both reform and tax cuts, which means our deficit spending is again being ignored. It is as if the whole world has capitulated to the idea that we can spend our way out of the debt. In the article I cited, McCormack wrote:

"Objections to austerity were understandable after the 2008 financial crisis, when growth was languishing below 2% and sizeable negative output gaps suggested that overall employment would be slow to recover. But now the merits of austerity seem to have been forgotten just when it is needed once again."

Those who oppose austerity often cling to the idea that a major reduction in government spending can change future expectations about taxes and future government spending that encourage private consumption and propel forward overall economic expansion. They further argue that, in periods of recession and high unemployment, austerity policies are counter-productive, because reduced government spending can increase

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Bruce Wilds profile picture
Bruce Wilds is an independent businessman and licensed general contractor that owns real estate in the Midwest, his holdings include apartments, retail space, and office complexes. He has invested in several businesses and traded both commodities and stocks for several decades. Wilds considers himself well anchored to reality and the economy as he maintains, designs, and leases buildings. His work has made him keenly aware of rapidly changing lifestyles and trends in new business formation. The not for profit blog he maintains incorporates many of the experiences and knowledge garnered from his hands-on business style, extensive travels, and studies of history, politics and economics. Bruce Wilds is also the author of the book "Advancing Time", the book focuses on how the ever quickening pace of change impacts today’s society and the massive challenges it creates. He feels that it is crucial we understand that we are living in a unique era the likes never before experienced by past generations. History viewed in the framework of mans time on earth forms the crux of this somewhat radical perspective. Journeys from the beginning of man to our current state helps us make sense of our fast changing chaotic world. Advancing Time illuminates the responsibilities society faces. Used as a tool Wilds wrote it with the hope it would help clarifies the choices before mankind, guiding and giving hope to those who want to have a positive impact.

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