Austerity programs consist of a set of policies established by governments experiencing financial debt problems within their operational budgets and choose to embark on a commitment to reduce spending for public goods and services. Austerity programs can be highly controversial and disruptive to an orderly society if the populace mobilizes against the government for taking such action after unreasonable spending sprees based on whatever logic the government may stipulate.
The process can be political suicide for representatives in certain areas. The measures typically demand reduction in services to the lower socioeconomic level of society, often in response to previous over-spending that has amounted to transfer of public funds into the hands of individuals who need no handout. Depending on the public perception of the spending irregularities that created the need for the austerity program, the majority of voters often feel that much of the overspending results in enormous profits of a specific wealthy minority that is financed by the lower sectors of society to rectify the balance sheet by forced quality-of-life sacrifices.
Austerity programs are not always implemented initially by the legislative body that was involved in creating the problem; national debt problems can be inherited. Often, the situation has been created by prior lawmakers having passed legislation "in the dark." An example would be a legislature that, just as they recess at the end of the fiscal year, authorizes pay raises for its own members.
The populace of a nation whose government is instituting an austerity program is rarely happy with the measures. Reductions in public goods and services always adversely affect the least empowered members of an economy, many of them with no alternative means other than government assistance. Educational loans for the common individual are a prime example of the fact that not all expenditures are handouts.
Most austerity programs include an increase in taxes, which may create a sense of society-wide shared responsibility for bearing the brunt of the measures, but this creates controversy among competing theories on the impact of taxes on an economy.
Austerity programs that include shared sacrifice do little to quell the mobilization of the public. The issue becomes the reversal in operational tactic from the theory of justified spending without limits to one of reducing spending on the least able of society. Voters tend to hold politicians accountable for bad policy through the ballot box.
The perceived need for austerity measures often does not arise until the situation is beyond repair, and thus creates more ill will among members of an economy that has seen significant growth in specific segments of the economy which have access to legislators, while at the same time having experienced zero or negative growth for the average citizen or business.
This can presently be seen in both Europe and the US. In Europe, austerity programs proposed by the IMF are not going to help the economies of various Western countries. What is being called for is a combination of higher taxes, lower wages and less government profligacy. Additionally, governments are compelled to sell off assets.
But in actuality, government is made up of people. And these people have usually been prevailed upon by money power – Western power elites – to borrow more money than the country's citizens can easily repay. When the business cycle turns sour, as it inevitably does, the debts taken on by the country prove unpayable. By this time, the person(s) who have obliged the debts have left power and perhaps even left the country while those remaining now bear the responsibility.
Institution of austerity measures is a very cynical maneuver, designed to crush sovereignty and to force a country's citizens to place their national possessions on the auction block. This action also reinforces the power of government, as money resolutely flows through political configurations from which the private sector is excluded.
This is what is happening in Europe and America today. The result will be chaos and ruin – as it always is in such circumstances. The question is only whether "austerity" will do any good. It will not.
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