On July 23, 2012, The Huffington Post published another article as part of a series on the global impact of austerity––”A Thousand Cuts”––from affordable housing funds lost in San Francisco to increasing class sizes in New York, food inspector cuts in Canada, disability benefits taken away in the United Kingdom, decimation of France’s solar industry, and more.
The poor and middle classes have shouldered by far the heaviest burdens of the global political obsession with austerity policies over the past three years. In the United States, budget cuts have forced states to reduce education, public transportation, affordable housing and other social services. In Europe, welfare cuts have driven some severely disabled individuals to fear for their lives.
But the austerity game also has winners. Cutting or eliminating government programs that benefit the less advantaged has long been an ideological goal of conservatives. Doing so also generates a tidy windfall for the corporate class, as government services are privatized and savings from austerity pay for tax cuts for the wealthiest citizens.
Advocates of austerity measures have sold their proposals as a means to improve the economy.
“It is an error to think that fiscal austerity is a threat to growth and job creation,” declared European Central Bank President Jean-Claude Trichet in July 2010.
“We’re going to cut spending to get the debt down, help create jobs and prosperity, and reform government programs,” vowed Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, in a February 2011 commentary for Real Clear Politics. Ryan would later declare that his budget plan, with far more aggressive austerity measures than those ultimately enacted by Congress — including $6.2 trillion in spending cuts — would have spurred $1.5 trillion in economic growth and created 2.5 million jobs.
As many economists predicted, however, the austerity policies implemented after the financial crisis have proved to be a losing proposition for the global economy. The strong economic growth that austerity advocates predicted has not materialized, with the United States showing only anemic improvements, and European countries sliding back into devastating recessions.
In the United States, President George W. Bush’s tax breaks for the wealthiest citizens were extended, while unemployment benefits and even food stamps have gone on the chopping block.
“Austerity policies are literally a redistribution from the bottom of the income spectrum to the top,” said Dorian Warren, a professor of political science at Columbia University and a fellow at the Roosevelt Institute, an economic policy think tank. “In Wisconsin, both wealthy people and businesses got tax breaks, while middle-class and working-class employees of the state essentially got crushed.”
Yet none of this has slowed the bipartisan American political movement for greater austerity. The U.S. budget will reach the so-called fiscal cliff at the end of the year, when a number of tax breaks expire and harsh budget cuts under the 2011 debt ceiling deal kick in. Republicans in Congress are calling for additional slashing of federal spending, and they have been joined by Wall Street Democrats. Former Rep. Harold Ford Jr. (D-Tenn.), now a managing director at Morgan Stanley who supported the American bank bailout, advocated for austerity during a June appearance on NBC’s “Meet the Press.”
http://www.huffingtonpost.com/2012/07/23/austerity-wall-street_n_1690838.html
