Source: Composite image by G_marius
There are strong supporters and opponent of the austerity measures implemented during the crisis.
More austerity?
The European financial crisis and the challenges faced by the European currency countries have serve are justification to push forward austerity policies in most EU member states. In economics, austerity refers to policies used by governments to reduce budget deficits usually linked to adverse economic conditions. These policies include spending cuts and tax increases. Several countries, such as Ireland, Greece, Portugal and Spain, applied important austerity measures to redress difficult financial situations they underwent during the recent European sovereign-debt crisis. However, these austerity policies do not seem to have produced the same effects across countries. Some economists and policy-makers claim that more austerity is necessary in Europe, while others point at austerity measures as aggravating factors for the crisis.
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1360 xp
344 posts
Largely agree with you with one caveat....efficiencies will only get you so far. Pretty soon just about every industrialised western nation (France included) will need to revisit its social welfare policies covering pensions, health and unemployment benefits and decide whether we go the same road (with the inevitable end of unfunded liabilities and default) or opt for something more along the lines of a Singapore model (private service delivery under a government framework). Singapore spends 1.6% GDP in healthcare, France almost 12% - i am not sure singapore has worse coverage?
1257 xp
247 posts
Austerity is not a bad thing. Actually, in western Europe, Japan and the USA most of the countries have been dealing with public deficits every year for the last 30 years, not only in economic downturns, but also when the economy was going well. It's stupid to spend more than you earn. It's crazy to observe that the objective for deficit is 3%. Should be zero deficit! This is common sense. Now, the problem is not to reduce a public deficit but how you reduce it. Politicians are generally lazy and cowards, so they go for the two easy solutions: cut spendings with an axe (like freezing or reducing salaries for all public servants, or reducing the public benefits), or increase main taxes (VAT, tax on salaries). But they don't work seriously and other interesting questions as: is our administration effective? is it necessary to have so many political levels in modern times (example in France: city, association of cities, department, region, state, European Union)? Not only those differents levels cost more money, but they also compete between each other and make it harder for citizens and companies to work efficiently.
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