What does austerity do?

SPAIN-ECONOMY-LABOUR-DEMO

Written by Nathan Olsen

Austerity, the world is in the vice-like grip of austerity. Governments cut expenditure, usually in public sector services, and this is depicted to us as a good thing, we’re saving money, right?

Austerity works, undeniably, but only to a certain extent. Forcefully decreasing the lack of money we spend means that money is saved and thus, the deficit decreases and this is all good. Yet it should not last any longer. The global financial crisis (yes -global- as in no, Labour didn’t single-handedly ruin our economy) threw the financial sector into absolute disarray, created unemployment in droves and decreased wages drastically, but that was 7 years ago.

The reality is that we do not need to continue with these pessimistic and crushing measures, despite the national debt we still carry. All we hear is the deficit, the deficit, the deficit. Governments seem not to realise that in not pumping money into the global economy, people aren’t going to spend as much. Consumers who don’t spend money aren’t consumers. It is portrayed as a risk to our economy to increase borrowing, to allow more money into the system – and yes it is a risk, but it is a far greater risk to continue cutting public expenditure. Measures of austerity devalue and cripple our public services in order to clear debt, anti-austerity policies would allow our country to build up its economy once more.

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