Austerity

Federal fiscal austerity does not equal national austerity. I hear Statists and other Leftists complaining that the economy cannot withstand the sort of cuts to federal spending that conservatives recommend. What the economy needs, they claim is more federal spending. The economy cannot withstand austerity when demand is already weak.

Well, the federal government spends VAST amounts of money. But it doesn't spend all of the money. Thank God. And if the federal government did start to roll back its overspending, most people probably wouldn't notice very much - at first. A bunch of government employees, service contractors and suppliers of consumables would take a hit when they had to go find honest work elsewhere at a competitive wage. State and city governments would have to re-evaluate the services the provide and the employee benefits they dispose.

But the national economy would trundle on as these temporary disruptions worked themselves out. However, at the same time, businesses and entrepreneurs would realize they have re-gained some economic freedom and would seize the opportunity to expand or to launch a business.

I suspect that federal austerity does equal national prosperity.

We tried the other way and it didn't work, let's try this.