Austerity has shaped American politics and policy for almost four decades. Over that period, the pressure for deficit reduction and spending cuts has been ongoing and intense. Even when liberals have found a modicum of political space to push through new social initiatives, such as President Obama’s Affordable Care Act, the agenda has quickly returned to constraining and limiting the growth of government. Democrats have generally joined Republicans in embracing this cause. The debate has centered on how far to go with austerity, rather than whether austerity is even the right objective.
That is the point of a recent spate of books from the unrepentant Keynesian left, which offers a potent, if largely unheeded, critique of contemporary public policy. These books argue that we’re in the mess we are in today—an anemic recovery, chronic underinvestment in the public sphere, and the specter of EU collapse—because of the austerity policies that the United States and Europe have chosen.
The U.S., Japan and Europe risk drowning in debt, with public obligations in rich countries hitting levels close to the historical peak reached in World War II.
How did the most advanced countries in the world get it so wrong?
Overly optimistic budget projections, poor data on government liabilities and a flawed understanding about how shocks can hurt public finances, the International Monetary Fund says in a new policy paper published Tuesday.
Note that the latter quote describes actual data, while the former just throws out the word “austerity” without any justification.
My impression is that these two trends are popular. People who look at the data think that government spending went permanently up around World War II and then up another large increment in the last decade.
Meanwhile, people who talk about Obama, Republicans, Democrats, and Keynes have repeated the word “austere” so much that it is assumed to be true with nobody bothering to check.
“Meanwhile, people who talk about Obama, Republicans, Democrats, and Keynes have repeated the word “austere” so much that it is assumed to be true with nobody bothering to check.”
You give them a lot of credit: Jacobs and her ilk are more likely liars and propagandists, though you may be right that they are too stupid to even look up the numbers.
According to this chart I found from Josh Barro, Total U.S. Government spending has risen from about 28 to about 36 percent of GDP since 1970:
http://www.forbes.com/sites/joshbarro/2012/04/16/lessons-from-the-decades-long-upward-march-of-government-spending/
How that translates to “austerity” is difficult to fathom.