3. “Austerity on its own” can impede economic growth.
A number of economists have repeatedly emphasized that austerity is not the answer to spurring economic growth. A group of private sector and government economists have said that the U.S. unemployment rate would be about a point lower (roughly 6.5 percent) and its economic growth greater without the emphasis on deficit reduction that has been at the center of numerous clashes between President Obama and Republicans in Congress.
The French government has announced that it is ending austerity measures with no one less than Finance Minister Pierre Moscovici saying that “austerity on its own impedes growth.” President Francois Hollande was elected on promises of ending austerity yet has, time and again, consented to austerity measures insisted upon by Germany. Meanwhile, France’s economy has worsened since Hollande took office, with unemployment at a record-high 10 percent and an ongoing recession.
4. Austerity has lasting, damaging effects on the next generation.
In a sort of “present pain for future gain” rationale, politicians have cited the importance of not passing on huge levels of debt to the next generation as the reason for austerity measures. But the effect of cuts on education and health and other services to children must be taken into account, UNICEF underscores. UNICEF has specifically pointed to the U.K.’s austerity policies as having the potential to make children’s prospects in the country “one of the worst” in the developed world.
Youth unemployment is indeed at record levels in Europe. 62.5 percent of young people in Greece are unemployed. That rate has grown by one percentage point since April of 2012, meaning that, by early 2014, it would pass 70 percent. European leaders say they are aware of the extent of this problem, which is by no means limited to Greece; youth unemployment is 56 percent in Spain. But just revamping education and training programs and other changes that officials are considering are far from enough. No wonder that people say there is a “lost generation” in Spain and in Greece.
5. Austerity is bad for your health, your children’s health, your grandkids’ health.
UCLA researchers have found that austerity can not only adversely affect a person’s health, whether by cuts to nutrition subsidies for mothers and children and to other welfare programs or through depression, stress and other mental health issues. Suicide rates have indeed increased in Europe and in the U.K. But the stress from a lingering economic crisis can have a toxic genetic effect on people. Ongoing stress can trigger chronic inflammation, which increases the risk of heart attacks and even cancer; such changes can actually occur at the genetic level and be passed down to your descendants.
In other words, politicians who claim that austerity now means prosperity later should realize that playing the role of Scrooge today means that’s how they’ll be seen by posterity.
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