The public policy blog of the American Enterprise Institute

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Discussion: (4 comments)

  1. Seattle Sam

    I’ve found austerity to work well and regularly in the businesses I have been involved in. The reason it works is that it involves a concerted efforts to eliminate things (and people) that have poor economic returns. Unfortunately government’s definition involves eliminating air traffic controllers rather than seizing the opportunity to stop doing things that are utterly unproductive — like spending $1.20 (after compliance costs) to get $1.00 in taxes that they then send to people who claim to be disabled or to buy weapons systems that the military doesn’t even want.

  2. Barry Soetoro

    I would love the author or the gentlement he quotes to let us know which times specifically are good for austerity. Also, define austerity as a metric we can measure.

    1. Charlie

      Austerity is like pornography. I cant describe it but I know it when I see it. This aint it.

    2. It is a shame that AEI has moved so much towards the pro-big-government side that it no longer pretends that prudence is necessary. Had their researchers looked to history they would have seen how austerity works far better than stimulus that tries to prevent it. When faced with a collapse in economic activity as malinvestments had to be liquidated President Harding stood aside and let the market do its job as he cut government spending and taxes. The market corrected the errors and new investment activity by the private sector created a boom. Hoover and FDR tried to prevent a decline and wound up turning a recession into a Great Depression.

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