As the UK waits to see if they’re going to triple dip we are informed how “austerity doesn’t work” and how it’s caused more damage rather than fixed anything because government cut backs slows the economy further by removing money from the government ecosystem and slows the economy.
What they don’t talk about is that the European version of “Austerity” includes “increasing revenue” into the government which is itself a sham.
First, “increasing revenue” for the government is done by increasing taxes and fees. This removes more money from the economy the consumers could have spent elsewhere.
Second, removing consumer money from the economy means less money spent by the consumer which translates into less money to business, less payroll, less VAT and ultimately drives DOWN revenue into the government coffers thereby compounding the problem they’re supposedly trying to fix.
We hear this same language here, that we need to reduce spending and increase taxes to get the government’s checkbook straightened out. But don’t fall for it… I’m reminded of an Einstein quote:
Insanity: doing the same thing over and over again and expecting different results.
But that’s what it is. So if we know this is what happens why do it? Think about what those motives could be for a moment…. there aren’t many options.