John Stossel: It is a myth that 'austerity' does not work
So say the Big Spenders.
With a condescending sigh, they explain that Europe made deep cuts in government spending, and the result was today's high unemployment. "With erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far," writes Paul Krugman in The New York Times.
That doesn't stop leftists from complaining about cuts or stop Europeans from protesting announced austerity plans. But if austerity means spending less, that hasn't happened.
Iceland was hit by bank collapses — but government ignored street protests and cut real spending. Iceland's budget deficit fell from 13 percent of gross domestic product to 3. Iceland's economy's is now growing.
Around the same time, Japan went the other way, investing heavily in the public sector in an attempt to jump-start its economy, much as the U.S. did with "stimulus" under President Obama. The result? Japan's economy stagnated.
In the U.S., politicians imply spending limits would be "cruel" because vital programs are "cut to the bone." But we are nowhere near bone.
Consider this family budget:
• Annual Spending: $35,370
• New Credit Card Debt: $10,870
• Existing Debt: $167,600
When I show that to people, they laugh and say the family is "irresponsible." They are dismayed when I point out that those are really America's budget numbers, with eight zeros removed:
• Spending: $3,537,000,000,000
• Deficit: $1,087,000,000,000
• Debt: $16,760,000,000,000
Then people say: "That's terrible! We have to balance the budget."
Actually, we don't need to "balance" it. We just need to slow spending growth to about 2 percent a year, so the economy can gain on our debt. But politicians won't do even that.
C'mon. Federal bureaucrats spend $3.7 trillion! But most people can't think of anything to cut?
But make no mistake: As people my age retire and demand Medicare, America will eventually go broke.
John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "No They Can't: Why Government Fails, but Individuals Succeed."
READER COMMENTS: 0
- George Will: Scotland's epic vote - 0
- Charles Krauthammer: Obama's uncertain trumpet, again - 0
- Maureen McDonald: Ray Rice and the everyday problem of domestic violence - 1
- Another View -- Jason Bedrick: An important court victory for parents and taxpayers - 3
- Thomas Sowell: Mob rule economics is bad for everyone - 8
- George Will: Eviscerating the 1st Amendment is extremism - 5
- Jonah Goldberg: Upholding America's honor in a dangerous world - 0
- Kathy Sullivan: We are in for a nasty, dishonest election season - 25
- Charles Arlinghaus: Don't apologize for not voting - 5
READER COMMENTS: 0
- Find the hidden cash stashed downtown - 0
- Sam Asano's Let's Invent: Burning questions about driverless cars - 0
- Your Turn, NH -- Ted Menswar Jr.: How Manchester pulled together to honor one of its greats - 0
- Strategery: A war by any other name - 0
- Not every human gets elected, but that chicken certainly pecked away at the legal system - 0
- Freeh dumb: Favoritism in Vt.? - 0
- Mother of Bedford student hit by car says safety should come first on school grounds - 0
- Nashua couple's minivan stolen with toddler in back seat - 0
- Scotland independence battle reaches fever pitch - 0
Find the hidden cash stashed downtown
Brady, Patriots bounce back with big win
In 2nd District race, Garcia bucks Obamacare
Public be damned: Litchfield latest example
Hot spotlight put on NH domestic violence