The Politics of Parsimony

By Gross, Daniel | Newsweek, June 21, 2010 | Go to article overview

The Politics of Parsimony


Gross, Daniel, Newsweek


Byline: Daniel Gross

How politicians worldwide are buying votes by cutting spending.

If British voters thought they had replaced the dour visage of Labour Prime Minister Gordon Brown with an optimistic one in fresh-faced Tory David Cameron, they were sadly mistaken. On June 7, the 43-year-old Cameron brought down the hammer, telling the British public that the most urgent issue ahead "is our massive deficit and our growing debt. How we deal with these things will affect our economy and our society, indeed our whole way of life." With a deficit set to top 11 percent of gross domestic product this year, and a debt of $1.12 trillion and rising, Cameron prescribed a harsh regimen of spending cuts and possible tax increases. Tony Blair's motto was "Cool Britannia." Cameron's is likely to be "Austerity Now!"

At first, most developed economies responded to the global financial crisis in 2008 and 2009 with stimulus; they increased government spending and cut taxes. John Maynard Keynes provided the playbook: in slack times, the government needs to fill in for diminished private demand. But 2010 is shaping up to be a year of parsimony. To win support for an international bailout, Greece enacted a tough package of budget cuts and tax increases. Spain's left-wing government at the end of May slashed civil-servant pay by 5 percent and froze pensions--even though one in five Spaniards is out of work. Recently, German Chancellor Angela Merkel unveiled a $144 billion package that would raise taxes on airline flights and cut defense spending and public works--and Germany's deficit is a manageable 5 percent of GDP. "We can't have everything we want if we are to shape the future," Merkel said.

We're not hearing that kind of rhetoric in the U.S. yet, but the new austerity has crossed the pond. Even though unemployment remains at 9.7 percent, the House of Representatives in May scaled back a proposed jobs bill out of concern for the deficit. President Obama recently called for federal agencies to identify cuts of up to 5 percent in 2012. States and cities are slashing budgets and raising taxes. Around the world, what economist and columnist Paul Krugman has called "the pain caucus" is in the ascendancy.

Different countries are joining the caucus for different reasons. Many, especially slow-growing, highly indebted countries in Southern Europe (Spain, Italy, Portugal) see austerity as a way to avoid the fate of Greece. Others are reacting to fears of stimulus-induced inflation. In fact, with enormous unused capacity in the developed economies, signs of inflation are scarce. "To say that we need policies now to fight a global outbreak of inflation is like arguing that we need policies now to guard against the imminent alarming spread of the North Polar ice cap," says University of California, Berkeley, economist Brad DeLong. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Politics of Parsimony
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.