When Austerity Does Not Mean Drastic Cuts?

Russ Steele

I recently had and opportunity to meet and chat with Veronique de Rugy, Mercatus Center at George Mason University at free market retreat.  Her economic insight is extraordinary, especially in the use of data to make her point.   In this morning’s e-mail was this insight into European economics by Ms. deRugy

We are told that austerity in Europe has failed. The elections in France and Greece, for instance, are supposedly evidence of people’s opposition to severe cuts in spending. However, the growing anti-austerity backlash against Europe ignores one fundamental point: If there is austerity in Europe, in most cases it hasn’t taken the form of massive spending cuts.

The most important point to keep in mind is that whenever cuts took place, they were always overwhelmed by large counterproductive tax increases. While this balanced approach may sound good and appeals to our sense of fairness and moderation, but it can be a recipe for disaster. That’s because it fails to stabilize the debt, and it is more likely to cause economic contractions.


About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

2 Responses to When Austerity Does Not Mean Drastic Cuts?

  1. Arthur M. Day. says:

    Are these interesting times or what???

  2. Dena says:

    It’s very hard when you make a living at working in government to make a decision that would be for the good of the country but will get you kicked out of office. Our founding fathers had it right with the thought our elected officials should have day jobs other than running the country.

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