Austerity: The History of a Dangerous Idea
by Mark Blyth
Conservatives in America have succeeded in casting government spending as useless profligacy that has made their economy worse, centering the policy ... Show synopsis Conservatives in America have succeeded in casting government spending as useless profligacy that has made their economy worse, centering the policy debate in the wake of the financial crisis on draconian budget cuts. Americans are told that they need to live in an age of austerity since they have all lived beyond their means and now need to tighten their belts. This view conveniently forgets where all that debt came from. Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer. That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea.