Kitchen Table Economics: What is Austerity?

In economics, austerity is the policy of reducing government spending by cutting social services such as health care, education, food assistance, and other welfare assistance.  Governments reduce spending by cutting money for these and similar services. 

At the federal level, Republicans seek austerity by cutting social Security and Medicare and through the sequestration.  In the case of state governments in the U.S., public tax money is used for police, fire fighters, park services, nurses, doctors, social workers and health assistants.  Austerity programs cut these services.

In the current economic crisis, the governments of Ireland, Greece, Italy, Spain and Portugal have implemented austerity programs and cut their budgets.  This policy created more unemployment and made the recessions in these countries worse.

In the U.S. most states must produce a “balanced” budget. During the economic crisis fewer items were purchased such as clothes, cars, and homes and more people were out of work - thus they paid fewer taxes.  Since the states had less money from taxes, they adopted austerity policies and cut employment and public services.  They cut the services known as the social safety net, food assistance, child care and other supports. 

Austerity policies can be counter-productive because reduced government spending can increase unemployment and thus cost more money for unemployment insurance, food assistance, and other safety net programs. These cutbacks made the recession worse and last longer.

While unemployment remains high and economic growth slow, the government should not impose austerity measures that reduce essential programs that benefit working people and that shred the safety net for the most vulnerable. Rather, government policy should prioritize investments in job creation, public education and healthcare reform, while raising essential revenues by taxing the large corporations and wealthiest citizens who can afford to pay.

M4A Chapter Activist Training Call: How to Pass a Medicare for All City Council Resolution

June 30, 2018

Saturday June 30th at 4pm ET/3pm CT/2pm MT/1pm PST

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In March, Philadelphia DSA members showed up in droves with healthcare workers, community members, and elected leaders to pass a Philadelphia city-wide resolution supporting the Medicare for All Act of 2017 and affirming universal access to healthcare as a human right. This victory showed that in a city where the poverty rate is over 26%, city council leaders learned where to stand when it comes to universal healthcare. To move a national campaign to win Medicare for All, we need to build support from a broad range of cities and municipalities across the country. With some research, planning, and lobbying, you could work with city council members to pass a resolution of support in your city too!

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