Tag: austerity

The Biggest Budget in History

The Wall Street Journal notes today that the federal government spent more money in the just-concluded 2011 fiscal year than in any year in history, and no one noticed. What happened to all that austerity and all those spending cuts that we heard about all year? Well, some of us warned over the past year that they were all smoke and mirrors.

Now that the year’s over, you can see in this chart from the Journal that the federal government spent more and borrowed more in 2011 than in any previous year—$900 billion more than just four years ago, and $150 billion more than last year:

Tina Brown and the Economics of Recession

Talking about royal weddings on NPR, Tina Brown says that there’s high unemployment in Britain, as there was in 1981, because of Conservative governments’ budget cuts (transcript edited to match broadcast):

Of course, the wedding of Prince Charles and Diana occurred three decades ago, but Brown points out that there are plenty of similarities between the two eras. “2.5 million are out of work right now with the budget slashes and all the economic austerity that’s happening in England,” Brown says. “There were actually the same amount of people exactly out of work at the time of Charles and Diana, when Mrs. Thatcher came in and began her draconian moves.”

I know that Tina Brown is a journalist, not an economist, but surely she’s heard of the recessions of 1979 and 2009, both of which may have helped to usher in a new government pledged to economic reform. It isn’t budget cuts that have increased British unemployment, it’s the recession. The unemployment rate started rising in early 2008 and kept right on rising during the world financial crisis, which featured not budget cuts but massive spending by governments around the world.

Mega-Consumers against Consumerism

Adjacent articles in the latest New Yorker deplore “consumerism” among the American revolutionaries and the modern Chinese. You wonder how a magazine so concerned about manifestations of consumer desire would support itself. Surely it struggles along on a shoestring, preaching the message of austerity and simplicity to sincere but poor readers. In fact, however, these laments about consumerism in societies vastly poorer than our own are sandwiched between lush full-page advertisements for Chanel watches, Samsung home entertainment centers, single malt Scotch, Grey Goose vodka, Cristal champagne, David Yurman jewelry, German automobiles, and Norwegian Cruise Lines. The articles themselves appear on pages lined with small, elegant ads for Jay-Z’s book-ebook-app, tours of Wales, monogram rings, Aeron chairs, European berets, cashmere caps, and a remarkable number of expensive psychiatric facilities, perhaps specializing in the treatment of cognitive dissonance.