In Defense of Austerity as a Concept

Tyler Cowen posted this aside yesterday:

Now I am all for the UK trying ngdp targeting, or for that matter well-targeted fiscal policy, or both. I never favored their *tax increases*, often misleadingly labeled “austerity” for political reasons.

We then had a short Twitter conversation where I failed to convince him that even though he just doesn't like tax increases going into the austerity box, he should run with it anyway because ain't no way you're dislodging that one from the discourse.

But I chewed it over a bit more, and I really do not see where he's coming from. I would define austerity as "some combination of tax increases and spending cuts with the object of improving a government's balance sheet—meaning reducing debt or accumulating a surplus." And the reason everyone has been dumping on austerity for the last few years is that in a depressed economy (especially one in the Eurozone where the periphery has no control over monetary policy) reducing government spending reduces aggregate demand, worsening the depression, while increasing taxes takes money out of people's pockets, reducing aggregate demand and worsening the recession. Austerity seems like a good basin for these statements.

There are some more complicated explanations I've read but none more convincing than that kind of crude Keynesianism, and the latest evidence seems to support it quite strongly. Am I missing something?

Comments

Why Did Reality Winner Leak to the Intercept?

So Reality Winner, former NSA contractor, is in federal prison for leaking classified information — for five years and three months, the longest sentence of any whistleblower in history. She gave documents on how Russia had attempted to hack vendors of election machinery and software to The Intercept , which completely bungled basic security procedures (according to a recent New York Times piece from Ben Smith, the main fault lay with Matthew Cole and Richard Esposito ), leading to her capture within hours. Winner recently contracted COVID-19 in prison, and is reportedly suffering some lingering aftereffects. Glenn Greenwald has been furiously denying that he had anything at all to do with the Winner clusterfuck, and I recently got in an argument with him about it on Twitter. I read a New York story about Winner, which clearly implies that she was listening to the Intercepted podcast of March 22, 2017 , where Greenwald and Jeremy Scahill expressed skepticism about Russia actually b

Varanus albigularis albigularis

That is the Latin name for the white-throated monitor lizard , a large reptile native to southern Africa that can grow up to two meters long (see pictures of one at the Oakland Zoo here ). In Setswana, it's called a "gopane." I saw one of these in my village yesterday on the way back from my run. Some kids from school found it in the riverbed and tortured it to death, stabbing out its eyes, cutting off its tail, and gutting it which finally killed it. It seemed to be a female as there were a bunch of round white things I can only imagine were eggs amongst the guts. I only arrived after it was already dead, but they described what had happened with much hilarity and re-enactment. When I asked why they killed it, they said it was because it would eat their chickens and eggs, which is probably true, and because it sucks blood from people, which is completely ridiculous. It might bite a person, but not unless threatened. It seems roughly the same as killing wolves that

Internet Writing and the Content Vacuum

It's been a few times now I've had full weekday control of the Monthly 's headline blog, Political Animal, and I feel like I have a decent idea now what it's like being at the top level of blogging. (Not to say that I am at the top level, of course, just that I've walked in those shoes for a few days and gotten some blisters.) Anyway, the first thing I've noticed is that it is really, really hard to do well. I've had days before when I just didn't have anything to do and ended up at home writing 4-5 posts in one day on this site, but pro blogging is an entirely different beast. The expectation is that during the day you will write 10-12 posts. This includes an intro music video, a lunch links post, and evening links and/or video. So that means 7-9 short, punchy essays on something , with maybe 1-2 of those being longer and more worked out thoughts. This ferocious demand for content is both good and bad. The iron weight of responsibiliy—the knowledge

Ryan Cooper

Search This Blog