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Pisces's avatar

When a European country faces a debt crisis, austerity is seen as a major part of the solution. Why is austerity not seen as a virtue in America?

Asked by Pisces (718points) July 30th, 2011

All the talk in the US seems to be about the government spending too much. But isn’t the deficit ultimately caused by too much consumer credit?

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8 Answers

WestRiverrat's avatar

In this case no. The deficit is caused by the government spending more than it takes in. If every private consumer paid off their debt tomorrow, we would still face this debt crisis.

Any entity that borrows 40% of its budget annually is in trouble. If a private company did it, that company would soon close, and the officers may face criminal charges.

DarlingRhadamanthus's avatar

When you say “Europe” you mean the Continent, correct? Not the UK?

In the UK, austerity and cutbacks in government spending…have been met with rioting and a lot of anger. People do not want social programs cut back and the social welfare system here in the UK has very long and far-reaching tentacles. It also has extremely high benefit (welfare) fraud. The problem with the UK is that it is paying the European Union (who is bailing out so many countries as the Euro tanks) approximately 40 million pounds a day . This money could be spent on needs here in this country. Austerity seems to be only for “the little guy” not those in power.

The massive spending is going on in the UK and in the EU as well. It is not relegated to the USA. This is affecting all countries. I have not seen the EU or the UK decide to adopt any sort of “austerity program” at all. People might be doing it on their own, not because the government tells them to…but because they have no choice . No one has the mindset that was part of Europe and the UK during WWII where everyone was united and people were clipping coupons and there was rationing.

And honestly, I don’t think that any citizen of Europe/UK would be happy to start rationing when the bureaucrats and bankers and huge corporations are living high, and partying as if it’s 1928. Austerity? If the UK and the EU citizens are “practicing austerity” it’s out of necessity….but someone should let the bureaucrats and corporate bosses know….because they’ve confused austerity with prosperity….mostly for themselves.

ETpro's avatar

@Pisces Welcome to Fluther. Great question.

Greece is facing a real debt crisis. The people there generally don’t want to work much, they cheat on their taxes, and they want lots from their government—far more than we expect or get. Austerity is the only way out of a real debt crisis. We aren;t facing a debt crisis.

We are facing a political crisis. If we continue to spend more than the rest of the world combined on defense, If we must spend far more per person for our dysfunctional healthcare system, then austerity means we stop investing in education, research, the environment, and infrastructure. That is not likely to keep us positioned as the leader of the free world. It’s a formula to turn us into a third-world country.

We have been spending too much for the revenue we are raising. We need to decide what is worth spending on, and then adjust the loopholes out of the tax code till we are developing sufficient revenue to do that and nothing more. That’s the way out. But we can’t even have the national conversation about what We the People want from government because we are wound up in left/right hate and political talking points.

rooeytoo's avatar

I think very few practice austerity as it is defined in the Homepage Dictionary

1.austere quality; severity of manner, life, etc.; sternness.
2.Usually, austerities. ascetic practices: austerities of monastery life.
3.strict economy.

for the fun of it. And it doesn’t matter where you live. But if it becomes a necessity because of your economic situation, then you just do it again no matter where you live.

You don’t give any hints in your profile where you live, makes me curious???

wundayatta's avatar

Austerity is not a virtue; it is a necessity. It is a necessity that is being imposed on the US right now, and it will cause a lot of problems, as it will in Europe.

They say that if we take our hit now, we will be in a better position to grow later. That may be true in Europe, but I don’t think it is true here. They have to take the hit because their debts are unmanageable. In the US, our debts are still manageable.

Simone_De_Beauvoir's avatar

Good Question. Cause we’re gluttons.

rooeytoo's avatar

I’m not a glutton! I am a proud non-glutton!

mattbrowne's avatar

It is a necessity to pay more taxes for people who can afford to pay more taxes. Both in Europe and the US.

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