Austerity for the rich

It’s only just occurred to me …

That when we say that in times of national economic hardship, we need to practice austerity so that we live within our means …

We always mean that the poorest must tighten their belts — in the present case, by cuts to tax credits for the working poor. Why do we never mean that the richest must tighten their belts, by tax increases? Isn’t that austerity as well?

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I don’t think there is any intrinsic reason why “austerity” should mean “austerity for the poor”. We’ve just got used to it meaning that.

7 responses to “Austerity for the rich

  1. Hear, hear. Austerity ends up being a way for the divide to widen instead of a means towards a brighter future. The rich already have buttloads of money (by definition) and enjoy the greatest benefits of the nation. They should be the first in line when a nation needs to “tighten its belt”.

  2. “Will teach parents that children cost money”? Did he really say that?! The only parents who aren’t deeply aware that children cost money are those that are so rich that the marginal cost of children has dropped from ‘immense’ to ‘trivial’. Like, oh, IDS, or anyone else on an MP’s ever-more-inflated salary.

  3. I thought there were statistics showing that the incomes of the rich had fallen by more than the incomes of the poor during the recession?

    Of course, even having fallen by a greater amount, the incomes of the rich are still bigger than the incomes of the poor ever were, but that’s because they were richer than the poor to start off with. By definition.

    But the idea that the incomes of the rich haven’t fallen at all (or even have grown) while the incomes of the poor have is, I think, not borne out by the statistics?

  4. Here in America, one of our parties just got done having a debate where they basically promised free stuff to lots of people. As I’ve stated here before, I think doing that with borrowed (or printed) money is dangerous.

    I actually have to disagree with you that politics shouldn’t be moderate. I think the fact that there appears to be no moderation in America or the UK is going to lead us to trouble.

    I would be fine with all kinds of welfare spending IF we had no deficits. But deficit spending and debt is just a way for politicians to gain power now and push the problems of their policies into the future. I find that to be as morally reprehensible as not spending enough on welfare now. It is certainly not responsible leadership. It gives the politican the benefit of appearing to do something without the pain of raising taxes to pay for it. Again reprehensible.

    In America we had some people who advocated for this kind of thoughtful spending and taxes, but alas the Blue dog democrats were burned to the ground by the left and the right.

  5. T writes: “I thought there were statistics showing that the incomes of the rich had fallen by more than the incomes of the poor during the recession?”.

    [citation needed]

    I don’t say you’re not right; but I think this is a surprising claim, and I would like to see some evidence before taking your word for it. What we do know is that the wealthiest thousand families in Britain have more than doubled their wealth since the recession began in 2009.

  6. jwerpy says: “I actually have to disagree with you that politics shouldn’t be moderate.”

    I can’t parse out those negatives. Are you saying that you disagree with my claim that politics shouldn’t be moderate (a claim that I have never made)? Or that you disagree with me and claim that politics shouldn’t be moderate?

    I would be fine with all kinds of welfare spending IF we had no deficits. But deficit spending and debt is just a way for politicians to gain power now and push the problems of their policies into the future.

    This is incorrect. It’s well-established economic orthodoxy that investing during times of recession is the way to return to prosperity. See for example the testimony given before the U.S. House Committee on Small Business in 2008 by Mark Zandi, chief economist of Moody’s Economy.com. The best estimates were that various government spending increases yielded results whose value was 1.36-1.73 times the expenditure, with the return on various temporary tax cuts was 0.27-1.29 and that of various permanent tax cuts was 0.29-0.48. See the report for details.

    In short, deficit spending is widely recognised as the way to get out of recession. (The other half of the equation, which is where the Blair and Brown governments went wrong, is that during economic booms, that is the time to wind down spending and run the economy at a surplus.)

    That said, I do agree with your main point, which is that we should not shy away from raising taxes in order to pay for the spending that we as a nation need to do — both to alleviate short-term suffering and to promote long-term growth.

  7. Pingback: The first of two reasons I am very sad about the Brexit vote: direct consequences | The Reinvigorated Programmer

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