Severe budget cuts (for example, the kind required by the sequester), also known as “austerity” policies—expected to be implemented in 119 countries across the globe in 2013—are the wrong solution to the world’s economic crisis, concludes a new paper released by the Initiative for Policy Dialogue and the South Centre.
The idea that government spending is needed most when millions are unemployed and the economy needs a kick start is common sense. Yet those in Congress who have been pushing budget cuts year after year, and now support making the misguided sequester permanent, seem to avoid employing common sense at all costs. Instead, they keep pushing the same old ideas—no matter the consequences.
And the consequences of austerity are dire. In the paper, The Age of Austerity: A Review of Public Expenditures and Adjustment Measures in 181 Countries, authors Isabel Ortiz and Matthew Cummins find that the costs of austerity policies “are being thrust upon populations who have been relentlessly coping with fewer and lower-paying job opportunities, higher food and fuel costs and reduced access to essential services since the crisis began. In short, millions of households continue to bear the costs of a 'recovery' that has largely excluded them.”
The types of austerity measures being implemented or considered worldwide read like a 1% wish list: cuts to pensions and Social Security, reductions in food and fuel assistance for the poor, job losses and wage cuts for civil service employees, increases in regressive taxes that disproportionately impact low-wage families and making it easier to fire workers while making it harder to get cost-of-living adjustments.
Americans left out of the jobless recovery are not alone. The pattern is global and the solutions must be as well. Workers worldwide need robust safety net programs, access to job training and education, investments in infrastructure and other policies that will promote the virtuous circle of economic growth with shared prosperity. The world’s 99% is waiting!