Austerity vs. the Obama approach

Europeans are torn about the best approach to fix their messed-up economies:  austerity (cutting government budgets and deficits) or stimulus (the government spending even more money and running up even bigger deficits in an effort to jump-start economic growth).  Austerity, as recommended by Germany, had been the plan, but recent elections in France and Greece have favored the pro-stimulus side.  Who is the role model for this position?  President Barack Obama and his stewardship of the American economy.  See  Germany, U.S. head to G-8 summit with starkly different economic policies – The Washington Post.

 

Europe rejects austerity–how about the USA?

The countries of the European Union are voting out the leaders who had been pushing austerity measures to reduce debt, cut back the welfare states, and get their economies on a more solid footing.  French President Sarkozy was ousted in favor of  socialist Francois Hollande.  Greece, the nation in the worst shape of all, has voted out the coalition of center-left and center-right parties that accepted the tough conditions of Germany’s bailout.  In fact, German Prime Minister Angela Merkel is herself facing political setbacks.  And so is Great Britain’s David Cameron.

Now is all of this just the political dynamic of voters turning against the incumbents when the economy is a mess?  In that case, the trend might seem positive for American conservatives.  Or is it, as most commentators are saying, a reaction against the austerity measures, with voters not wanting their benefits cut, to the point of embracing politicians who promise to spend even more in order to help the economy grow.  In that case, it would herald well for American progressives.

Not that America has experienced much austerity from the current administration.  But do you think the general public would support a serious attempt to cut the budget any more than the Europeans would?

via After voters reject austerity, Europe ponders future of grand project – The Washington Post.

Loving austerity

You’ve got to hand it to the Brits, as Anne Applebaum explains:

“Vicious cuts.” “Savage cuts.” “Swingeing cuts.” The language that the British use to describe their new government’s spending reduction policy is apocalyptic in the extreme. The ministers in charge of the country’s finances are known as “axe-wielders” who will be “hacking” away at the national budget. Articles about the nation’s finances are filled with talk of blood, knives and amputation.

And the British love it. Not only is “austerity” being touted as the solution to Britain’s economic woes, it is also being described as the answer to the country’s moral failings. On Oct. 20, the government will announce $128 billion worth of spending cuts, and many seem positively excited about it. . . For these voters, the very idea of instant gratification is anathema, in theory if not in practice. And they elected this government because they’ve convinced themselves that they’ve had enough of it.

Austerity, by contrast, has a deep appeal. Austerity is what made Britain great. Austerity is what won the war. It cannot be an accident that several British television channels are running programs this year with titles such as “Spirit of 1940,” all dedicated to the 70th anniversary of that “remarkable year” of rationing, air raid sirens and hardship. One series, “Ration Book Britain” is even devoted to that era’s parsimonious cooking. “With bacon, eggs and sugar rationed, wartime cooks had to be jolly resourceful,” explains an advertisement for the show. Its host promises to “re-create the recipes that kept the country fighting fit.”

Sometimes the depth of the Anglo-American cultural divide reveals itself in unexpected ways, and this is one of those moments: No cooking show featuring corned beef hash and powdered eggs would stand a chance in the United States. Perhaps for similar reasons, nobody is talking about “austerity” in the United States either. On the contrary, Republicans are still gunning for tax cuts, and Democrats are still advocating higher spending. Almost nobody — not Paul Krugman, not Newt Gingrich — talks enthusiastically about budget cuts. Instead, our politicians use euphemisms about “eliminating waste” or “making government more efficient,” as if no one had ever thought of doing that before.

Despite the deep shock the United States supposedly experienced during the banking crisis of 2008 and the resulting recession, we are, in other words, still far from Clegg’s “long-termism.” Hardly anyone in America is talking about cuts in Medicare, Medicaid or Social Security, for example, the biggest budgetary items (even though “private” pensions now look a lot safer, even when taking stock market fluctuations into account, than those who will depend entirely on a bankrupt federal budget 20 years hence). In Britain, by contrast, everything is on the table: pensions, housing benefits, disability payments, tax breaks.

Politics explain some of this difference, but I reckon history explains more of it. The last period of real national hardship Americans might remember is the 1930s, too long ago for almost everyone alive today. But rationing in Britain lasted well into the 1950s, long enough to color the childhoods of many politicians now in power. Nostalgic Brits, longing to re-create their country’s finest hour, remember postwar scrimping and saving. Nostalgic Americans in search of their own country’s finest hour remember postwar abundance, the long consumer boom — and, yes, a time when even instant gratification wasn’t fast enough.

via Anne Applebaum – For the U.S., Britain’s austerity is a foreign concept.

The conventional wisdom is that politicians dare not ask Americans to make sacrifices of any kind.  Do you think Americans could come to love austerity?


CLOSE | X

HIDE | X