The crises of austerity

Austerity , commonly defined as the difficult economic conditions created by government measures to reduce public expenditure .This definition stands in confrontation with the Political Economist Mark Blythe who defines it as the nonsense way on how to pay for the massive increase in the public debt caused by the financial crisis.

Giving clear analysis on how the modern day world lives in an all-encompassing debt from credit cards, mortgages and government debt as a result of the 2008 financial crisis. Blythe makes the argument that austerity is really an unjust use of the working class for the repayment of the upper-class debt.

Can this really be the case found in today’s society? According to Blythe there is no doubt, and here is why:

The bottom 40% of the US income distribution hasn’t had a wage increase since 1979 so it can be understood as to why many people have been found in a place of debt. Blythe re-asserts the point that banks who took loans were really just trying to maximise their own profits over base survival which is why there is clear inequality in how the repayment is arranged.

Blythe paints the picture of the private sector that is focused on reducing and paying off their debt, ultimately decreasing spending .This causes for the Government intervention , which has so far showed itself through increasing public consumption over private consumption by  either increasing taxation or ridding of the government services.

This brings us to the point that Blythe is emphasising in his book which is that the results of government intervention in cutting of services is felt very differently on the scale of income distribution because, the bottom 40% are the ones most in need of government services such as the police, healthcare and education so really, they are experiencing the effects of the crises more dramatically than the top percent who have caused the colossal magnitude of the crisis in the first place.

Is this relevant ?

In 2014 it was found that 71 coalition MP’s who voted for NHS privatisation had financial link from companies trying to profit from this deal.Moreover a recent survey by the public services found out of nearly  11,000 employees, including paramedics, teaching assistants, hospital porters and police staff of which (43%) described their standard of living as worse than a year ago, and a quarter (26%) said they owed more money than they did 12 months ago whilst In the US, the richest 400 Americans own more assets than the bottom 150 million.