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5 Reasons Why Austerity Bites Today and Will Even More Tomorrow

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3. “Austerity on its own” can impede economic growth.

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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126 comments

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9:02PM PDT on Jul 24, 2013

Thanks for posting

8:19PM PDT on Jun 26, 2013

It has proven that it is not the solution.

4:26AM PDT on Jun 25, 2013

Austerity leads to failed businesses, job cuts, which in turn means more people having to be
helped through the benefits system. The government then says that welfare is 'too expensive', cuts it, people have less to spend, buy less, more businesses fail.....
This way leads to madness. Why can't we build more houses, roads, hospitals, schools (as the birthrate is rising), get people back into work, and activate the economy again.

11:44PM PDT on Jun 24, 2013

noted

3:16PM PDT on Jun 22, 2013

Austerity has been huge failure in every country it was tried in.

12:12AM PDT on Jun 21, 2013

Yes, Dale O., I was referring/responding to comments from the "other" Dale, the one who goes by Dale R AND dale r, who admitted or stated anyway, that he is a paid (by the meat industry) person to imitate vegans. I didn't find it funny, nor is this discussion an appropriate place to comment such things.

10:59PM PDT on Jun 20, 2013

Insightful comment Barbara L, it certainly does seem to appear so when it comes to what you stated about why the poor are sometimes referred to as peons. So many of the rich have no qualms about calling for all sorts of cuts to taxes and in the U.S. they cry long and loud about Obamacare being ‘socialist.’ They cry out that the U.S. simply cannot afford this but it does not even come close to providing universal health care as in many western democracies. Not to mention that good health care is cost effective as people who are working are far more productive if they have adequate care rather than going to work feeling not so well all the time but they find adequate care too costly. Yet, if one believes the cries of protest from the rich, providing any break to those people paying a high cost for health care and not making high end salaries…one would think the that the sky was about to fall. Teresa B, remember the song “Rambling Rose.”

10:06PM PDT on Jun 20, 2013

Fascinating how there are often cuts in health care by various governments around the world. This sort of thing does not obviously affect the well to do and the very rich as they can buy whatever health care they desire but for those on a limited income/middle class, cuts to health care is often very difficult. There was even one hospital that 60 Minutes had profiled awhile back where doctors were constantly told to order expensive tests even when these were not justified and doctors who declined to do so were given warnings while those complying were treated well by the employer. Medicine for the same procedures in the U.S. is often far more expensive than in comparable western nations.

http://www.cbsnews.com/video/watch/?id=50148539n

10:05PM PDT on Jun 20, 2013

Agreed, Diane L concerning the matter that you just mentioned because that was certainly advice not pertaining to the austerity cuts so prevalent these days. I assume it was dale r that you were referring to and not me as he is vegan. Perhaps some are eating their ‘mock chicken’ sandwiches that contain no meat but are made to look like meat. Mock is often not healthy, a lot of salt and other things in the ingredients, perhaps eaten while drinking a mocktail. Obviously, on some subjects there is no ‘meeting’ of the minds. Glad that the green stars are working again today. Agreed, Karen M as the corporate executives never really get around to making the cuts starting at the top up, it always seems to hit the little person first and the corporate CEOs and other upper levels continue on their merry paths with plenty of perks and bonuses. Some companies don’t even bother giving the employees a yearly pay raise. How charming but the upper echelons always take care of their own. I am bonded with giving the CEOs a dose of reality, perhaps they can live for a few months on a low wage salary with no access to money squirreled away!

7:59PM PDT on Jun 20, 2013

Yes, Dale, please take your advice, seriously or not, to a more appropriate discussion. This one isn't about being vegan (or not), nor is it appropriate to joke around with people who you can't see "face-to-face" who could hear voice inflictions or expressions on your face to determine if you're trying to be "cute" or mock them. C2 is not a place where "mocking" others is appropriate.

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