is Austerity the way to go?

[WaterMan]

Controversy: Main article: Austerity

 

 

Austerity programs can be controversial, as they tend to have an adverse 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.[8][9][10]

 

Economist Richard D. Wolff has stated that instead of cutting government programs and raising taxes, austerity should be attained by collecting from non-profit multinational corporations, churches, and private tax-exempt institutions such as universities, which currently pay no taxes at all.[11]

 

In 2009 and 2010, workers and students in Greece and other European countries demonstrated against cuts to pensions, public services and education spending as a result of government austerity measures.[12]

 

Following the announcement of plans to introduce austerity measures in Greece, massive demonstrations were witnessed throughout the country, aimed at pressurizing parliamentarians into voting against the austerity package. In Athens alone 19 arrests were made while 46 civilians and 38 policemen had been injured by June 29th, 2011.

 

Opponents argue that austerity measures tend to depress economic growth, which ultimately causes governments to lose more money in tax revenues. In countries with already anemic economic growth, austerity can engender deflation which inflates existing debt. This can also cause the country to fall into a liquidity trap, causing credit markets to freeze up and unemployment to increase. Opponents point to cases in Ireland and Spain in which austerity measures instituted in response to financial crises in 2009 proved ineffective in combating public debt, and placing those countries at risk of defaulting in late 2010.

[jetsfan]

Austerity was named the word of the year by Merriam-Webster in 2010.