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Not So Austere
July/August 2012

Austerity or growth? The question is ubiquitous, the stark choice between the two accepted as natural and self-evident.

In fact it is absurd. The "austerity" of the current parlance has nothing austere about it, and the "growth" so widely posited as its alternative simply means more spending, deeper debt and lower output. The choice is self-evidently skewed — if growth really meant growth, who would ever choose austerity? The dichotomy clearly false — a healthy economy starts, not ends, with healthy public finances.

Silly it may be, but the "austerity or growth" formulation represents a dangerous hijacking of language. A glance at the leading British newspapers tells the story. President Hollande, we are told, wants to revise the new European fiscal treaty to put more emphasis on growth, by which France's new Socialist Party president means additional deficit spending for his favoured causes. In Britain we read of the Labour Party's internal argument over whether to lean towards austerity or growth. Ireland's tinkering with a deficit-fuelled entitlement culture is called "starvation austerity". We are informed that Portugal has taken austerity to a new level with a decision to scrap four of its 14 public holidays. And so on.

What are they talking about? The noun "austerity" is derived from the adjective "austere". Dictionary definitions of "austere" focus on sternness, severity, an ascetic quality, the denial of pleasure: qualities that even now, in the depths of a lengthy spending-created crisis, EU governments have no interest in showing. George Osborne, for one, is praised (or reviled) for the courage (or cruelty) of his swingeing austerity programme. But Britain's debt is forecast to expand by 60 per cent (from £1 trillion to £1.6 trillion) during the austerity years 2010-16. That this comes on top of a 53 per cent increase in public spending in real terms during the New Labour years shows just how many luxuries — wind farms, foreign aid, wildly incontinent domestic welfare — are immune from the savage axe of austerity. Meanwhile, as Greece burns, the binge of social transfer payments and corrupt local infrastructure boondoggles in the rest of southern Europe continues as if it's 2007.

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July 12th, 2012
9:07 AM
Neither austerity or growth will solve the problem of the huge debt mountains our governments are accruing and the fact that 9 of the largest banks are sitting on derivatives worth 230 Trillion dollars, perhaps three times the world economy must only make the situation worse. A folly sure to burst at any time. Yet it takes a 12 year old Canadian girl called Victoria Grant to have grasped the concept and found a solution. The plan is not radical and is roughly the same as the founding fathers of America stipulated. The creation and control of money should be the preserve of Governments and not banks. Only when this happens can our governments pay off the national debt in a few years if the control of quantity is kept in check. Often you hear examples of what happened to Deutsch-mark in the 1920's as a warning but this was a deliberate policy to make the money so worthless that the hated reparations could be paid back without care.

Ron Edge
June 28th, 2012
7:06 PM
I'll keep it simple: Take 2&1/2-3 Trillion Dollars. Give it to the 99% or give it to Goldman/Sachs, et al. Where do you think it will do the most economic "good" in regards to jobs, savings, buying back debt, etc. Now, I warn you:Its a trick question!! That's how much, more or less... probably more... has gone to the 1.00%ers, 0,10ers% and the, ever-so-loveable, 0.01%ers. "good", it would seem, is in the eye-of-the-beholder. You'll deny it?? Like the previous article, which makes no plausible case for making those people vastly richer than they already are... What A Surprise!!

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