One View Of Austerity

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by: Constantin Gurdgiev
Summary

Below is a picture of austerity we've had (allegedly) in recent decades.

The things are savage: debt is up from circa 70% to over 110%.

Cost of debt carry is down from just under 4% to under 1.75%.

A picture is worth a thousand words, some say. So here is a picture of austerity we've had (allegedly) in recent decades:

Source: @Soberlook

The things are savage: debt is up from circa 70% to over 110%. Cost of debt carry is down from just under 4% to under 1.75%. So where are all those fabled public investments? And who has benefited from this massive increase in debt? Virtually all - financialized (a nice euphemism for being absorbed into financial assets valuations). Austerity, after all, is just the old-fashioned transfer of resources from the broader economy to the select few, made more palatable by the superficially low cost of borrowing.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.