We have an economic crisis; we have lived beyond our means. Those two statements are surely true, and so is the conclusion that we need austerity. The devil, however, is in the details, so here are a few…details on how to implement austerity to get the country back on track.
I agree with conservatives that when you overspend, you must compensate via frugality. How properly to restore economic health (yours or your country’s) depends on how the money was overspent in the first place: it does no good to starve yourself to save money if you keep on gambling.
It is not just people who can gamble; so can classes and regimes. When a class gambles, if that class happens to be rich, the gambling likely takes the form of stealing as much money as it can from the rest of society, on the assumption that it can party forevermore without being called to account. Russian tsars, Chinese emperors, and Wall St. CEOs in 1929 lost those gambles. When a regime gambles, it may well take the form of going on foreign adventures: Napoleon salivated over Russia; Bush and Cheney over Iraq. The regimes may, like any gambler, get on a streak, but eventually a policy based on a gamble will reach the end of the streak.
The two most expensive forms of gambling in America are Wall St. fraud and Washington’s new penchant for military empire-building. Yes, we certainly do need austerity in America – on Wall St. and in the Pentagon.