Problem with austerity- turning off the spigot BUT also continuing to service the debt and raise taxes

Austerity Good or Bad?

Posted on October 12, 2015 by Martin Armstrong

QUESTION: Martin,

The ‘Austerity’ argument seems a bit confusing.

Surely,  “Austerity” means reducing the size of Government and is an understanding that we can’t keep funding zillions of civil/public servants and on the other is a reduction of the Social Security Bill – healthcare, social benefits, the cost of the un and underemployed etc – both of which seem to be excellent objectives unless you are in one of the groups affected. Isn’t it impossible to return to or have a vibrant economy unless and until these objectives are achieved?

AB

ANSWER: The problem with austerity carried out in the fashion is they are turning off the spigot, which is ending Marxist/Socialism, but they are continuing to service the debt and to accomplish that they hunt the rich and raise taxes, then agree to exchange all info and in the process you cause capital to hoard and not invest. So you are not really ending socialism, you are moving more toward totalitarianism.

So we will get these riots for they are not just people who receive, these are the people who cannot find a job because nobody is creating them with deflation. We have to look at both sides and this is why our proposal is to eliminate taxation at the federal level to unwind this mess from both directions.

So there is more to this than just reducing social programs. Doing that raising taxes to still service debts you end you with taxation without representation for the current workforce must then pay for spending that they never received anything in return.