The biggest roadblock to convincing somebody about the merits of what you believe in is your conception of it. This is to true for many thing including whether you think austerity is good or bad. I will take a broad view of austerity that entails not only trimming the budget but also raising taxes of various types. Such a thing can be good, bad and ugly at the same time.
Let's start with the bad. Austerity can be counterproductive in tough times like these. Just like raising taxes too much is probably going to reduce tax revenues as people work less and evade taxes, so will cutting spending in times of economic difficult actually increase the deficit. Cutting spending can be a good thing in the long run but its immediate effect is going to be bad. To take an example, let's say government lays off personnel, a part of the money it saves by firing them must go to them as unemployment benefits. If you decide that's too much welfare and cut that too, these people will have little money to spend on the necessities of life and will be forced to borrow or steal. Here's where austerity gets really ugly. Cutting social services will not automatically enrich the people and push them to spend. That will happen only if you cut taxes simultaneously. Unfortunately, taking that course takes you back to square one-any money saved from not spending is compensated by lower tax revenue. Lower taxes however only makes sense if people have employment in the first place. State employees will not be magically integrated into the private sector. And so, if you take all the aforementioned steps you're going to end up with less social services, weaker economy and higher debt.
That however still isn't such a bad thing. If the money given back to the people in the form of lower taxes gives them an impetus to spend more, it will make for the lost pubic investment.
Let's start with the bad. Austerity can be counterproductive in tough times like these. Just like raising taxes too much is probably going to reduce tax revenues as people work less and evade taxes, so will cutting spending in times of economic difficult actually increase the deficit. Cutting spending can be a good thing in the long run but its immediate effect is going to be bad. To take an example, let's say government lays off personnel, a part of the money it saves by firing them must go to them as unemployment benefits. If you decide that's too much welfare and cut that too, these people will have little money to spend on the necessities of life and will be forced to borrow or steal. Here's where austerity gets really ugly. Cutting social services will not automatically enrich the people and push them to spend. That will happen only if you cut taxes simultaneously. Unfortunately, taking that course takes you back to square one-any money saved from not spending is compensated by lower tax revenue. Lower taxes however only makes sense if people have employment in the first place. State employees will not be magically integrated into the private sector. And so, if you take all the aforementioned steps you're going to end up with less social services, weaker economy and higher debt.
That however still isn't such a bad thing. If the money given back to the people in the form of lower taxes gives them an impetus to spend more, it will make for the lost pubic investment.
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