Today's Question: Does Austerity Work?

In today's heated political atmosphere, one of the most persistent charges is that "austerity" does not work. In the USA, most of these claims discuss the terrible cuts inflicted on poor folks by the Republicans in order to give breaks to millionaires and billionaires. In Europe, the party identifications are different, but the basic tenor is the same.

Here is the actual answer: no one can say that austerity does not work, since no one has actually tried it. Government spending in America has soared over the last four years. In the first fiscal year of the Obama term, there were two enormous, one-time federal spending efforts, TARP and the Stimulus, which resulted in a surge in federal spending of about $1.5 trillion. Despite this huge spending increase in year one, the spending levels during Obama's term have not decreased at all. That's right, the initial $1.5 trillion surge in spending has been maintained. The GOP in the House has been able to stop further growth in spending in the last year, but the federal government continues to spend, spend, spend.

The complaints of the left about harsh Republican cuts are pure nonsense. Think of it this way: suppose your boss walked in today and told you he was giving you a raise of 75%. Then, the following year, your boss told you that because of the huge raise you got last year, you would not be getting another raise this year. Would you go home and complain about the terrible cuts in you salary? Would you claim that your boss was trying to starve you? Of course not, but this is essentially the same as what the liberals are now claiming.

In Europe, there also has not really been any austerity. Most governments have started to hold down spending, but not a single country has given the process a chance to work. Instead, governments have been voted out and policies switched. In other places, there have been riots. Perhaps the best example came when there were riots in France over a change in the retirement age. College kids were rioting over whether or not they would have to retire 2 years later. Just writing that sentence shows how ridiculous the whole thing is.

The sad thing is that no one ever actually argues about the waste and fraud in government spending. Whenever a cut is proposed, it always is described as taking food from the starving or forcing people to be homeless. The actual expenditures are not reviewed. Just this week a report by the GAO done at the request of senator Coburn outlined the fact that most spending for federal job training programs goes to the people who administer those programs rather than into the training itself. There are about 50 different programs, each with its own administration. In only 4 of the programs has anyone ever checked to see whether the graduates of the program obtain jobs. So we have tens of billions of dollars spent each year to support duplicative programs which may not even work. No one knows.

Is it "austerity" to take 50 job training programs and combine them into one? If thousands of federal bureaucrats who administer these programs are replaced with a staff of 100 that cover the one remaining program, is that austerity? If expenditures on job training are cut by 30% without reducing the level of training provided in any way, is it austerity? Why does no one ever discuss this? Why do people cede the argument to the demagogues who talk about starving the poor? The American people are not stupid. They will understand this point, but first they have to be told this point.