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Forums - Politics Discussion - why do governments impose austerity?

Kasz216 on 21 December 2012
the2real4mafol said:
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

The biggest sinkhole for public debt tends to be welfare for the poor and non working... this is the case in the US and Greece, and was a big factor in bringing down Spain who didn't send more then it took in but quickly tumbled over because of it's high unemployment and requirments to such people once the construction boom collapsed.



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HappySqurriel on 21 December 2012

Here are a few questions to explain it to you ...

Based on your current household income would you be willing to pay $30,000 per year to pay for the services you receive from the federal government? Would you even be willing to pay the additional $10,000 per year to cover the deficit? Would you at least be willing to pay the $800+ per month to pay off the debt in 25 years?

When you include the unfunded liabilities to the budgetary shortfalls above the government would need to collect nearly $60,000 per year in taxes for every household to be financially responsible based on their current level of spending, and the median household income of the United States is in the low $40,000 range. Is the government really providing more value to the typical American than the combined total of everything else they buy?



thranx on 21 December 2012
the2real4mafol said:

I never understood why governments around the world continue to think cutting services and any industries would help a economy to recover. All austerity does is destroy any chance of creating better services and more jobs and more importantly do what austerity hoped to achieve in the first, which is lower the debt. 

For an economy to work, you have to invest as it creates new jobs and thus for the money invested, more is collected in tax revenues, which lowers the debt.

Simply put, it can be said, "you must spend money to make money"

If anyone here agrees to austerity, please tell me why, i would like to know.


Austerity only means that the govenrment is no longer the one choosing where the money goes. it will still be spent, but by those who earned it, and know better how to invest it. There are very few government programs that are done more effeintly or less costly than private companies. That is the problem with government spending, they just aren't good at it. the possible reason being they do not carry the risk of failure as its not their money they spend.



the2real4mafol on 21 December 2012
Kasz216 said:
the2real4mafol said:
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

The biggest sinkhole for public debt tends to be welfare for the poor and non working... this is the case in the US and Greece, and was a big factor in bringing down Spain who didn't send more then it took in but quickly tumbled over because of it's high unemployment and requirments to such people once the construction boom collapsed.

Yeah the welfare state tends to be on a balancing act with the rest of the economy. It's there to help only a few people at once, but it becomes a major problem to maintain when a quarter of your workforce is unemployed. Welfare relies completely on tax revenue, but in a recession this is very restricted as much less tax is collected due to fewer operating businesses and less workers. It don't help when you are simply better off from relying on the state than actually working like it seems to be in the UK, I think there should be benefits for the unemployed but not so much that it discourages people from working. 

I don't agree with austerity but if it's done responsibly and in the right areas then I guess it's ok



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