The Austerity Measurement: The Message to “Real” Americans: Vote European

—by , October 27, 2010

Long the punching bag of conservative United States commentators, Europe’s moves over the last few weeks toward an “age of austerity” (a term which not-yet UK Prime Minister David Cameron popularized) makes the budget handwringing of the Tea Party movement appear all talk and no trousers.

Or as Americans call them: pants.

Watching the new breed of conservatism wriggle out of comparisons to Europe is telling of the movement’s short-term political ambitions and the greater reality of American domestic policy. The public sector protests in France and Greece, the quiet desperation in Britain and Iceland, and the shadowy schadenfreude of Germany and Scandinavia don’t win votes on the road. Austerity may be sexy while you’re drunk on debt figures, but she’s damn ugly the morning after. For instance, you can’t spell job security with average government expenditure decreases of almost 20 percent, much of that coming from layoffs and decreased welfare services, as Britain’s coalition government has proposed. And significantly decreased expenditures for sacred cows such as the Department of Defense on the right and entitlement programs on the left is a political impossibility for the foreseeable future.

And a completely unscientific comparison of public sector job cuts in the UK applied to the US would be well North of one million, possibly even as high as two million. Couple that with comparative spending reductions on big-ticket items like aircraft carriers and laser-tanks (or whatever they’re making these days) and you’ll see private sector employment shrink as well. Try selling that to a country with unemployment hovering around 10 percent.

The Tea Party approach, on the state level, is more akin to France or Greece than it is Britain, though there are certainly parts of the British rebudgeting that would make a constitutionalist smile. With a harsh view of highly unionized public sector workers during tight budget eras, pension reductions and job cuts on the state level abound. New Jersey cut over 7,000 public sector workers last month alone in county employees, school boards and municipal workers.

For all the political interest, we’ve yet to see this latest incarnation of arch-conservatism have a serious effect on national legislation. Maybe Democrats haven’t given them a chance, but the stimulus-fighters aren’t willing to negotiate either. And wouldn’t it be oddly appropriate for “freedom fry”-declaring conservatives to start warming up to Europe as soon as Britain’s Labor Party is out of power? Margaret Thatcher’s rise occurred just prior to Ronald Reagan’s, and David Cameron may be hoping to similarly predate his conservative American counterpart.

Barack Obama’s administration has demurely bucked the trend of slashing budgets, choosing instead to spend America’s way out of the recession. Instead of being faced with Carter-esque stagflation, however, America and Europe are faced with the danger of deflation. And while there are a few government assets still left to privatize (just wait until some Chinese company buys the Eisenhower Interstate System), deregulation isn’t the word as much as less strict regulation.

So now being politically unpopular is popular. What happens when being politically unpopular returns to being unpopular?

Most of us have no idea. Austerity in the current consumer culture is a vague stoic ideal rather than a cold reality. The sober reality of cuts in public programs won’t do enough without raising taxes as well, a fact that is Tea Party anathema. There is no way to adequately tackle the staggering national debt without raising taxes, and in doing so, austerity becomes far less sexy for the self-described “taxed enough already.”

It’s a forgone conclusion that the British experiment won’t become the American experiment based on the current political structure, at least not before cracks in the new UK system are found. And while austerity in the face of recession enjoys some popularity here, historically, it doesn’t work. Great Depression calls for austerity only prolonged the era, and in modern analysis, the International Monetary Fund has found there’s no correlation between fiscal austerity and increased investor confidence. Fiscal prudence increases investor confidence, not austerity.

After all, who wants to invest in countries that don’t want to invest in themselves?

    reader responses
  1. Interesting column , I’m going to spend more time learning about this subject

    slacker on 4/29/2011 at 06:10 PM 


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