Uh, yeah.

Why is Greece in trouble?

Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared.

Public sector wages, for example, rose 50% between 1999 and 2007 - far faster than in most other eurozone countries. The government also ran up big debts paying for the 2004 Athens Olympics.

And while money flowed out of the government's coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit - the difference between spending and income - spiralled out of control.

Moreover, much of the borrowing was concealed, as successive Greek governments sought to meet the 3%-of-GDP cap on borrowing that is required of members of the euro.

When the global financial downturn hit - and Greece's hidden borrowings came to light - the country was ill-prepared to cope.

Debt levels reached the point where the country was no longer able to repay its loans, and was forced to ask for help from its European partners and the IMF in the form of massive loans.

Sound familiar? We have to curb this spending ASAP.

Because they have to... Austerity is essentially the less awful of two awful choices.

Stimulus spending has really never worked.  The only example that people point to as it working is WW2....

which coincidentally also had massive austerity.(for the consumer)

No.  Actually the unemployment rates and faling standards of living would of been worse had they not instituted austerity and instead defaulted on their debts.  We're talking "can't afford to import any medicine" third world country style drop.

Some people behave this way: We have a problem because we spent more money than we had, and now we have a huge debt, so the solution is to spend much more than before.

you dont understand basic economics do you?

Because the economy is fundamentally unsustainable. Structural problems in the economy have simply been hidden by the creation of more debt. The problem really isn't a choice between austerity and spending it is at it's heart caused by an increase in costs for fundamental sources of energy and resources. This has been hidden by increased retirement savings which is effectively consumer austerity and government austerity. It is essentially a method of gracefully contracting the economy to fit long term resource limitations. The current financial crisis at it's heart is just a good way to evaporate 'paper' money out of the economy.

The government is not capable of creating jobs out of thin air, only the public sector can do that. Tax cuts and de-regulation are the only way to actually create jobs.

All the government does is take money from one spot and move it to another thus giving the appearance of "created jobs" when really it killed jobs and the economy wherever it took the money from.

The US government can't even deliver the mail, how do you expect it to fix the economy? Only the private sector can.

Austerity simply does not work. It just creates a spiral of negativity.

What I want to know is why the "leadership" in places like the US and UK choose austerity for the masses while still increasing or maintaining the same amount of military spending at the same time.

I feel like I already know but... still.

I guess that's another thread though.

All I know is that austerity always affect the average citizen the most despite them playing no major part in the economy, you people think that's fair? We may have no choice but to cut, but it should truly affect the people who actually created the debt in the first place. I admit pure spending is not good, but neither is pure austerity. Tax loopholes should be fixed, stuff like Military and public sector bonuses cut, with a small increase in spending of police, education and loans for starting small business.

The problem is that the money in the boom times is never spent responsibly to start with, it's wasted on unnecessary tax cuts and wars, most of the time. We need to make sure debt is kept low in all countries to start with. I don't know if i'm right here, but the recession just seems to drag on and on with austerity