Balancing Budgets: The Austerity Dogma
The Austerity dogma of George Osborne asserts that a negative balance between public revenue and overall public spending (deficit) is a problem requiring immediate policy measures to eliminate it. He has gone further, asserting that the fiscal balance should be positive (surplus) when the economy is at or near its capacity. His invariant form of “correction” is expenditure reduction (aka “austerity”).
He and his supporters give three justifications for this dogma. There is the reductionist argument that compares public sector budgeting to households, so obvious to the austerity-advocates that it requires no explanation Households must balance their books (“cannot spend more than their incomes”), and the same applies (or should apply) to governments.
Anyone who believes that households must spend no more than current income has never bought a house, sent an offspring to university…
View original post 1,639 more words