Austerity can involve tax increases, spending cuts, or combinations of the two. It’s not limited simply to spending cuts.
That said, it very much matters what “kind” of austerity one engages in, as research indicates that tax increases and spending cuts have different respective effects on an economy.
Like most economic principles, there’s a big gap between theory and practice.
In reality Austerity is defined by tax breaks for the very rich, combined with spending cuts and privatisation - i.e. economic enclosure, debt peonage, and asset sweating - for everyone else. Sometimes that includes tax increases, but if som it usually means indirect taxation.
Austerity is purely ideological. Even the IMF acknowledges that recent Austerity regimes have underperformed expectations while examples of stimulus spending have had the opposite effect.
> In reality Austerity is defined by tax breaks for the very rich, combined with spending cuts and privatisation
This is objectively false, and a poor atempt at forcing a particular spin on a very objective definition.
Looking at Portugal, the bailout program enforced tax increases exclusively on the middle and upper class, along with publix sector workers who are by far more priviledged than private sector workers. For example, the bailout program saw the introduction of a new tax bracket for the richest taxpayers which forced a 53% income tax rate.
And also privatizations are implemented to avoid additional austerity pushes by providing the government with one-off sources of free cash thus avoiding further spending cuts or tax increases. Therefore, they are in fact an alternative to austerity, not a consequence.
> Austerity is purely ideological.
This statement is so mind-numbingly wrong that it boggles the mind how anyone in this point in time could be so disingenuous or clueless to keep parroting this silliness.
Let's look at Portugal, who doubled its sovereign debt fron 60% of the nation's GDP to over 120% in about 5 years prior to any mention of austerity, and did so by piling a string of yearly deficits of over 10% including a structural deficit of around 3%.
If your state is so dependent on overspending that it needs loans after loans to keep working and pay up salaries, who in their right mind will argue that they don't desperately need to cut spending and/or raise taxes to avoid going bankrupt or even to keep functioning?
If austerity was actually "purely ideological", how exactly would it be possible for Portugal to keep their 10% spending deficits?
What do you mean by "the very rich"? Rich by income, assets or consumption? Currently, lots of governments overtax income and sometimes assets, while undertaxing consumption. They tax the likes of Bill Gates and Warren Buffett a lot (right up until the point when they-- or perhaps their descendents-- actively donate their assets to some charitable trust or another) while leaving the crazy luxury spending of Larry Ellison and others like him largely untaxed! This is crazy, and is what a move to consumption taxes (what you call "indirect taxes" in your parent comment) helps fix.
> Austerity is a political-economic term referring to policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both.
"Austerity" can take many forms too. It's not something you should support as a black/white thing. There's a ton of context involved, including why the state needs austerity and also what long term goals are involved.
As far as I'm concerned if a government spent and loaned recklessly for decades and the only solution is to make temporary cuts so the government can go right back to spending (ie, no long term changes to government culture, risk management, and fiscal responsibility were made) then while it's still "austerity", it's not necessarily a very useful one.
Additionally, despite all of the FUD about "austerity" measures the average nation state across the entire western world (and in Asia too, minus Singapore) have exploded in size over the last few decades.
Most of these "austerity" programs are a tiny, temporary, sliver relative to the massive growth in scale of the administrative state.
"Social programs and public investment" are hardly the only things a government can cut. This is just a heavily biased counter-narrative used to protest against them. They may be the low hanging fruit given the entrenched interests which protect corporate welfare projects, tax breaks to "friends" of government, defence spending, foreign aid, the countless non-social agencies within government, etc, etc, etc.
Nor can you point to some half-hearted "austerity" where there was no change in the gov culture which brought about the unsustainable spending, nor factoring in the complete scale on which the previous government spent recklessly for which austerity is required in some countries vs others (and size of GDP, dependency on public investment/social programs, etc).
You're down voted, but this is no joke. Social programs are very often hyper-pragmatic, overly specific bandaids that effectively pile on each other indefinitely. Cutting social programs essentially only reliably occurs at bankruptcy or collapse, it will almost never occur as the result of the democratic process.
People do not run successful campaigns on the basis of displacing hundreds of San Francisco families, for example, regardless of whether or not those families are rightfully entitled to their housing or not. Once people have come to rely on something, it will upend their livelihood to remove it, and that is not something most people are comfortable voting for.
If you've ever worked in a government job, you can compare the state of the bureaucracy now to previous versions of the texts, and see that they only ever grow and compound on themselves.
It will get you downvoted, but not for the reasons to believe (psa: starting a post with "poor me, I the martyr know I will get downvoted for this" is frowned upon).
It's not a very good argument, to defend a reduction of welfare payments to discourage immigrants from coming. Immigrants are much more attracted to high salaries (which implies obviously that they want to work) than by high welfare payments.
Secondly, the example you give is typical of news coverage about terrorism. Flooding the news with stories about the attack and the perpetrator, with which you can gain exactly 0 useful information since it's essentially an anecdote. You're much more wise to look at large-scale data than single events, examined to exhaustion.
Even beside all that, you're clearly trying desperately to shoehorn your anti-immigration opinions into a discussion about an unrelated topic. That, also, is frowned upon.
"Secondly, the example you give is typical of news coverage about terrorism. Flooding the news with stories about the attack and the perpetrator, with which you can gain exactly useful information since it's essentially an anecdote."
Point taken: https://uebermedien.de/11488/kartenlegen-mit-kriminellen-aus...
"It's not a very good argument, to defend a reduction of welfare payments to discourage immigrants from coming."
I can't think of a better one. Or to speak with Milton Friedman: You can have open borders or you can have a welfare state. You can not have both. May I assume you are against a welfare state?
"Immigrants are much more attracted to high salaries (which implies obviously that they want to work)"
Most immigrants that I am talking about can hardly read in their own language. I can track down the statistic for you.
" than by high welfare payments."
Have you ever heard the word "welfare shopping"? They chose the country in Europe with the biggest payouts.
"Even beside all that, you're clearly trying desperately to shoehorn your anti-immigration opinions into a discussion about an unrelated topic."
I don't like that you give the impression I am against immigration. I am an immigrant myself and countries SHOULD attract immigrants. But it is a serious point of consideration that Portugal seems to avoid a specific kind of immigrant.
> You can have open borders or you can have a welfare state. You can not have both.
That's not saying that it's okay to "defend a reduction of welfare payments to discourage immigrants from coming." It's saying that if you don't reduce your welfare payments, you will eventually be discouraging immigrants from coming, probably by closing your borders. It's pretty much a political necessity. So Friedman's argument is actually the opposite, "let's reduce welfare so we can afford to have more immigrants here!" Or perhaps "you can have your generous welfare but be careful, this will eventually lead to discouraging immigration to the point of having de-facto closed borders, with all the unwanted side-effects of that."
"So Friedman's argument is actually the opposite, "let's reduce welfare so we can afford to have more immigrants here!""
No, this is YOUR interpretation of this statement.
First, the statement is neutral. Knowing Friedmans background it is clear that he was not a big fan of a welfare state (yet the idea of basic income is from him).
"..we can afford to have more immigrants here!"
No, the immigrants I was talking about would just not come anymore.
The claim that he is receiving 5400 Euros/month welfare is false. It was investigated by journalists. Other claims made on that webpage are also false.
