Should the United States consider austerity measures similar to Europe’s?

Eric Ringham October 21, 2010, 5:00 AM Oct 21, 2010

Great Britain is making deep cuts in spending to avoid bankruptcy. France is suffering widespread strikes and demonstrations over a bid to raise its retirement age to 62. Today’s Question: Should the United States consider similar austerity measures?

About the blogger

Eric Ringham

eringham@mpr.org

Stephanie

Why can’t our government have a box on our tax form that says “Contribution to pay off the debit”? A government fund raiser. Taxes are the lowest they have been in 60 years. High government spending started prior to 2007 to pay for a war, and still the country went into recession. I believe it is because we believe in gratification now, and pay later. Prior to the 70s those who could not easily afford credit could not get a credit card. We need to go back to giving credit to who is able to afford it. The economy will come back then stronger than ever. I will pay more taxes.

Clark

YES, YES and YES. We are headed for disaster with all the spending on the lazy slobs. As a wagon puller, I resent having more and more of my income and wealth confiscated by the government to support the increasing number of lazy slobs who are demanding more social spending.

Cut, Cut and cut some more then get the fire hoses ready in the event the fat lazy slobs get off the sofa and take too the streets.

This problem was created by both republicans and democrats so I am angry at both parties.

DMox

Yes.

First, we should mandate the level of per capita spending that Europe does on it’s population, affording them the same benefits of welfare, healthcare, retirement & education. Then we should cut back to levels that Europe is currently moving towards.

We will still end up spending significantly more to educate our students, provide healthcare to all of our citizens, and providing a safety net for families who face layoffs, unemployment & hunger.

Joanna

Yes. Let’s put the Pentagon on a diet. How much of your taxes goes to support military spending as opposed to social spending? Austerity measures for the bloated non-compete outsourcing to Halliburton would be a great start.

P. Nielsen

Absolutely not. The corporate interests and selfish tea partiers, right-wingers would just love that. They are of the frontier mentality – something that should have gone by the wayside long ago. It’s another way of eliminating the middle class in no uncertain terms. Measures such as those promoted in Britain and elsewhere will not bring those countries and its people back to economic stability, only greater instability. Going backwards instead of forward is what this is.

steve

this is a good question i what we need is a balance so that people are not so stressed out by finances-alot of it is attitude and focus towards life! some austerity is good but some greed is good!

Steve the Cynic

Would it were true, Clark, that everyone benefitting from governement social programs were a lazy slob. Then our problems would be as easy to solve as you imagine them to be. So, if an expensive health crisis bankrupts you and you can’t work any more, when you can’t earn your proverbial keep any longer, should we just leave you to die?

David Rogde

Abraham Lincoln said, ” . . . and that government of the people, by the people, for the people, shall not perish from the earth.”

So when the world’s wealthy and privileged drove the global economy into the ground; the French took violently to the streets, and the British marched with signs.

It’s got nothing to do with retirement age.
J

If only the British austerity measures that were enacted upon military spending could happen here. T-Paw always said that the MN K-12 education budget should always be a target because it takes up the largest percentage of the budget. Same thing with the US budget and the Pentagon … they take, what is it, %50 of the discretionary spending every year?
Kyle D.

We should always be thoughtful about our spending priorities and strive to make government spending more efficient. But the US economy is far and away the largest in the world– we can handle more debt than other nations can.

We can reduce spending, and depending on where we cut it wouldn’t necessarily be a bad thing. But austerity now doesn’t make much sense. It’s not like we don’t already have a heavy debt load, and with the mood so heavily anti-tax right now the US population is obviously not as serious about getting our fiscal house in order as some would like us to think.
bsimon

Absolutely not. Austerity measures will actually exacerbate the problem by adding government employees to the unemployment rolls.

The borrowing/debt problem has to be solved over the long term, and is best addressed through growth of the economy. The deficit problem has to be solved over the medium term and will have to be resolved before we can fix the long-term debt problem. But the short term problem is a demand problem, not a debt problem. As long as demand is depressed, companies are reluctant to hire new workers or invest in growth. So the path back to a sound economy starts with stimulating demand, which only the government is in a position to do.
Khatti

Should: yes

Will: no
James

Austerity programs can be controversial, as they can be perceived to have an impact on the poorest segments of the population. In many situations, austerity programs are implemented by countries that were previously under dictatorial regimes, leading to criticism that the citizens are forced to repay the debts of their oppressors.

http://en.wikipedia.org/wiki/Austerity

Maybe the fat cats should reign in spending… like I am forced to do.

∑

DTOM
Sue de Nim

It would be wonderful if there could be a tax imposed specifically on the under-regulated mega-businesses that got us into the current economic mess. Unfortunately, they’re the ones who are in the process of buying the upcoming election, so it’s not likely.
R-wing

P. Nielsen, I predict that sooner than later we will be back to a” frontier mentality”. We are on a unstable and unsustainable path with current technology. This house of cards is starting to fall to the wind. You had better learn how to build a log house and milk a cow:-)
Ron

Yes, austerity measures should be implemented! The government (Federal, State, County, and Local) now employs more than 35% of the working age population (according to federal statistics). Those people do not create wealth for this country and are paid for with our taxes. Similarly, the government (Federal and States) have run deficits in both good times and bad. The government cannot pay down its debt if it runs deficits 100% of the time.

Minnesota has had a “freeze” on new employment for several years but examining the statistics shows that the number of state employees continues to rise in spite of that. Do you really believe that you are getting more and better services from your government now than you did 10 years ago?

In an era when private companies are laying off employees and real wages are frozen or decreasing, government employees get COLA plus pay raises. Government employees are now being compensated at a higher level (wages plus benefits) than private sector employees. And goverment employees have much more job security. Why is that? It certainly does not seem “fair” or “equitable” to me.

I continuously hear the wailing and “nashing of teeth” about the sad state of our education system. Test scores are down, graduation rates are down, we are loosing our “competitive edge” because of “underfunding of schools”. When I went to middle and high school (admittedly in the 2nd half of the 20th century) class sizes were 45 students per teacher. The percentage of the taxes going to schools were less also. The outcomes (graduation rate and % of students going on to college) were better than now. I cannot find any statistical evidence that all the money spent on schools has provided better outcomes. Teachers continue to resist outcome or merit based pay raises and are still teaching with outmoded techniques that are failing. Why “thow good money after bad”?

If you took out all the Federal discretionary spending and the Defense spending, you would still have a deficit because of all the entitlement spending such as Medicade, Medicare, and SS (You should know this since you listen to MPR and they tell you this stuff). Trying to spend at the insane levels of Europe on social programs would lead to even more massive unsustainable deficits, much higher taxes, and chronic unemployment levels of 25% or more (like you see in European countries such as France, Spain, Portugal, Greece, and Italy). It would probably be even worse in the USA since we have off-shored most manufacturing and have fewer exports of services all the time.

Why would anyone in their right mind pay extra money into the goverment to help “pay off the debt”? Both the Federal and MN State goverments have shown that they will increase their spending every time they have an increase in revenue and never decrease their spending when their revenue decreases. Giving more money to the government is like giving money to a drug addict, you know they will just “blow it”.
Kevin VC

First off using a word like that needs a definition for many… Had to look it up to get a clue….

http://en.wikipedia.org/wiki/Austerity

And in general have we not been doing that already?

Is not our government not already suffering from it?

What we face is Plutocracy not big government.

Our Free Market failed us under BUSH.

It was the removal of regulations that sent the loan industry into a patterned ‘legalized’ ponzi scheme.

When we last had a real good economy and governement, those making 250K or more generally had 92% income tax….

We still gave bonus’s to good performers, but the rest was set to help promote schools and education.

Without it we would never had reached the moon.

Something we can not do now. Heck the shuttle program can only make LOW earth orbit now… And it is shutting down.

(When the next weather satilite goes down, don’t blame the government for failure to alert texas, florida, or Louisiana of the next catagory 5 hurricane.)

When we had our great depression we went into the hole, just as any family does under a emergency. Deficit spending should be done in economic situations like this. Sad thing is we were accelerating into a deficit cycle BEFORE it happened under Bush.

And that is after Clinton got that under control.

Now with the Ponzi scheme bubble bursting in 2007 and the deficit, it looks big. But we have no choice. To many are not being helped as it was.

Those that have must help those who have not, at least show your humanity to you fellows…. Is that so hard?
Kevin VC

“When we last had a real good economy and governement, those making 250K or more generally had 92% income tax….”

sorry, meant to say during the 1950’s to give idea of time I am speaking of.
Kevin VC

“When we last had a real good economy and governement, those making 250K or more generally had 92% income tax….”

Sorry, should have referenced the 1950’s to give idea when I was speaking.

(Also tried to post, seems to not have gone through… so if delayed, sorry also if posted twice.)
Steve the Cynic

Ron, there are lots of sectors of the economy that “do not create wealth for this country.” Banks, for instance, only serve to move money around the system so it’s not sitting uselessly under matresses, but by themselves banks create nothing. The question is not wealth creation per se, but whether they’re doing something that actually helps people live better in a cost-effective way.