by Duane Campbell.
The discussion pushed by the Peterson Institute seeks to focus on the deficit and budget cuts instead of jobs. This approach is called austerity.
The discussion pushed by the Peterson Institute seeks to focus on the deficit and budget cuts instead of jobs. This approach is called austerity.
In economics, Austerity is the policy of reducing government spending
by cutting social services such as health care, education, food assistance, and
other welfare assistance. Governments
reduce spending by cutting money for these and similar
services. At the federal level,
Republicans seek austerity by cutting Social Security and Medicare. In the case
of state governments in the U.S., public tax money is used for police, fire
fighters, park services, nurses, doctors, social workers and health
assistants. Austerity programs cut
these services.
In the current
economic crisis, the governments of Ireland, Greece, Italy , Spain and Portugal
have implemented austerity programs and cut their budgets. This policy created more unemployment and made the recessions in these
countries worse.
In the U.S. most
states must produce a “balanced” budget.
During the economic crisis fewer items were purchased such as clothes,
cars, and homes and more people
were out of work- thus they paid fewer taxes. Since the states had less money from taxes, they adopted
austerity policies and cut employment and
public services. They cut
the services known as the social safety net, food assistance, child care, and
other supports. Austerity policies
can be counter-productive because reduced government spending can increase
unemployment and thus cost more money for unemployment insurance, food
assistance, and other safety net programs. These cut backs made the recession worse and last longer.
While
unemployment remains high and economic growth slow, the government should not
impose austerity measures that reduce essential programs that benefit the
middle and working classes and that shred the safety net for the most
vulnerable. Rather, government policy should prioritize investments in job
creation, public education and healthcare reform, while raising essential
revenues by taxing the large corporations and wealthiest citizens who can
afford to pay.
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