Skip to comments.Not All Austerity Is Equal; We’re following Britain’s failed path, not Estonia’s successful one.
Posted on 01/28/2013 4:57:37 AM PST by TurboZamboni
Prominent economists, politicians, and pundits throw around the term austerity as if policies by that name always take the same form. They usually use the term to criticize the concept and its effects by pointing to Europes stagnation at the hands of savage cuts in government spending. But this mindset ignores the question: Austerity for whom? The answer is especially important if the United States, which has continued to follow in Western Europes footsteps with this months fiscal-cliff deal, is to learn from the Old Worlds mistakes.
Raising taxes on the private sector while government continues to gorge itself on tax-and-spend policies does not bring prosperity. Businesses undergo austerity by way of the recession-induced reduction in demand for their goods and services, yet the public sector doesnt feel the need to tighten its own belt commensurately. Increasing the public burden upon the private sector only compounds what is already a harsh business environment. This is what most European nations have tried as their austerity programs, and they continue to suffer because of it.
On the other hand, the proper form of austerity closes a fiscal gap by reducing the burden of the state upon the already struggling private sector and cutting spending; this does bring prosperity.
(Excerpt) Read more at nationalreview.com ...
In many states, the right kind of austerity is being implemented, such as low or no state income tax and union reforms resulting in less cost to the state and a declining union presence and influence.
States following the wrong path are losing a productive populace and facing higher borrowing costs. Their day of reckoning will come and they’ll have to do the right thing, but only when there is no other choice.
For those who remember the old Soviet Union, it was a grim place at least for average citizens. But not so for those in government. Contrary to the official ideals of equality and a classless society that the ruling communist regime espoused, the USSR created a privileged class of party members inside government the nomenklatura. This semipermanent bureaucracy earned higher incomes, got better health care, ate better food and had greater job security than average Russians, the much-despised proletarians. Today, our bloated government seems, in significant ways, to be creating this same dynamic.
...and CEOs, CFOs and other top managers of companies whose business models depend on government intervention on behalf of the business, the banksters whose "too-big-to-fail" status was codified in statutory law by Dodd-Frank, patent trolling businesses who use patent law to suppress innovation, the cultural gate-keepers whose business models depend on holding copyrights (more or less in perpetuity) to art, literature, or science others created, the "green" energy companies, not to mention the top managers of non-profits like major philanthropic foundations and universities.
And don't forget to put the word "nobility" in scorn quotes -- there's nothing noble about any of them. Or better still use the Russian nomenklatura.
I’ve looked at Estonia. It would be a very nice place to live. Quite a nice place indeed.
re: non-government “nobility”. You nailed them all, thank you. Been trying to put those thoughts into print and now having something to the point that I can use.