Austerity & Greed

Post date: Oct 02, 2012 1:4:31 PM

Austerity

Austerity is a conservative approach to money. An austere budget is one that restricts spending.  This is how I like to manage my own money. It allows me to save as much as I can for the future, and it conditions my tastes to a simple lifestyle that can be supported by a modest income. By living this way, I have been able to open up more economic choices for myself. For example, it has put me in a position to run for an office that barely pays $10,000 a year.

I would recommend this approach to any individual. But that does not mean that I would recommend it for a government. Consider the differences.

• When I decide to restrict my own spending, it does not have much of an impact on society. One less person is spending his money on a particular item. When a government decides to restrict its own spending, it has a tremendous impact on society. All sorts of people and businesses lose out on the income generated by those areas that are cut from the budget.

• Individuals are more limited than governments (who have their own currency) to manage their own money supply. Individuals can borrow money, but they have no legal means of creating new money. Governments can borrow money, but they also have means by which they can increase the amount of money in circulation in their society. This is important because it means that governments have more options than individuals when times get tough.

Greed

Greed is an ever increasing desire to accumulate more and more money or things that money can buy. Greed is a demanding master; no matter how much one accumulates, it is never enough to satisfy raw greed. I would never recommend that anyone or any government follow greed.

Austerity & Greed in Politics

It seems to me that in our current political debate about the federal budget and spending, what is being characterized as healthy government austerity is in reality an approach driven by unhealthy personal greed. Those who have plenty have become resentful of the contribution that society has asked them to make through taxes. They don’t like the adage: to whom much is given, of him shall much be required. The figure 47% sticks in their craw as the number of their fellow citizens who aren’t being made to pay taxes like they are. They want to put our government on a starvation diet because they figure a smaller government won’t ask much from them and would be too weak to demand it.

It is a common fallacy to assume that governmental austerity leads to the same outcome as personal austerity. Personal austerity can free a person from a lifestyle of living from paycheck to paycheck. Governmental austerity leads to an economic slowdown for the entire society. It is designed to improve the balance sheet of a government, but because it is done at the expense of its citizens, it usually doesn’t fulfill those goals as quickly or easily as its proponents promise.