Austerity is the standard requirement demanded by foreign banks and other foreign creditors when a nation's debts to foreign lenders becomes too high, yet probably less than one American in ten knows what austerity is. Essentially, austerity involves reducing the standard of living of the population to the point at which people can no longer afford to buy imports, while they work at low wages to manufacture products which can be exported to earn money to pay the foreign banks and other foreign lenders. Un fortunately, austerity is likely to be a serious traumatic experience for Americans, who won't understand exactly what is happening, but will only think that America has been betrayed by foreigners. As this impacts on the mental health of Americans, it is uncertain what will happen. The worst case scenario is that American voters will elect extremists who promise to threaten the foreign enemies hurting them with nuclear weapons. That doesn't mean that foreign nations should just give up on getting a large percentage of their loans back. What it means is that it is necessary to have a balanced strategy that minimizes harm to both America and to the foreign nations.
This doesn't make sense, given the poorly paid will buy the cheapest (which will necessarily involve imports) Austerity isn't anything to do with economics. Right wing economics gave us two failures: supply-side economics and neo-liberalism. Austerity is a means to avoid mentioning of those failures whilst supporting a political ideology.
Ha, irony... Anyways, most Exports the US receives for nothing in exchange, so I don't think you have anything to worry about. Also, households stop deleveraging a few months ago, so I don't see where the Austerity is that you are worried about.
The US has not engaged in austerity. We contained the rate of growth in some areas and reallocated the money elsewhere, but we are not spending significantly less.
Well, I've worked myself into a state of shock, and I do have a heart condition. Therefore, I'd better post on some less stressful parts of the message board for the time being.
Fiscal austerity is a general term that describes the redirection of government revenues from social services to deficit and debt reduction. It is called austerity because the people experience a reduction in their standard of living. The term was coined to describe the effect on the population of a government debt crises, where the IMF as the lender of last resort required draconian cuts to government social spending and the redirection of government revenues to currency support and debt repayment in return for cash. The usual result was the transfer of much of a nations wealth to overseas debt holders as IMF loans propped up the currency just long enough for them to get out, followed by the destruction of the middle class as lending disappeared and the entire economy collapsed as the government increased taxes, reduced spending and confiscated wealth to meet the conditions of the IMF, which were to ensure the repayment of overseas debt holders. In terms of the general definition the US has moved towards fiscal austerity. As measured against GDP federal spending is declining.
Most people think of austerity as less spending and higher taxes. We got the higher taxes thanks to Obama, but not the less spending. Since he took office Obama has been spending somewhere around $3.5 to $3.6 trillion a year, which is about a trillion bucks higher than what Bush43 averaged during his 8 years as president. So I ain't seeing much austerity here, and BTW Obama's budget is expected to be like $3.7 trillion?
