Gamesmith94134: Does Austerity Promote Economic Growth?
In answering the question of “Does austerity promote growth? Of course, it does not. There is no abstract theory that can predict how people will react to an austerity program; and I agree with Guarjardo and others on the results that governments adopted the austerity program tended to be followed by hard times. What does the austerity program mean? It is only the atmospheric perception on the search of the bottom of what or how people lives; it does not promote growth but it show more of the competitiveness in mere opened grounds.
When the story my friend told me of the donation to a college was a bad idea, because the college would engage programs available for its infrastructures, students and professors. It demands perpetuity to fit their budgets in growing. Often, the crisis situation arrives after the expansion of the donor’s buildings or library, or if the donors stopped their offerings; the fee will go up and a budget crisis will arise, especially more of the millionaire professors arrive with their BMW, and the student are going the other way with heavy debts. It is all psychological and economical under the spells of human behavior since most of the administrators and the budgets are not seasonally adjusted or commercially leveraged. It is why most our politicians are reluctant to follow well with the austerity program or obey to cutting the budget because they are not disciplined with the business cycle based on the competitiveness to growth; and they may not understand how the zigzags make the world goes around.
I can understand Mr. Robert J. Shiller may scales the growth on the projective on the economy; since the present austerity programs are not servicing the growth. However, the austerity program enforced to search the bottom line of productivity, the reactions of the politicians and its populace will make a distinguished level of tolerance for the excessiveness and suffering within the system or its governance allows. In addition, such deleverage reestablishes the essences of the missing elements on normalcy of the business cycle or risk factors like interest rates, currency exchanges. When the sovereignty debts created the imbalance crisis by liquidity and solvency; and they indicate the budgetary measures is derailing from the business cycle and becoming political at a sovereignty level. Economy may not grow under the budgetary enhancement as much of the Keynesians believe. It is because growth comes after the business cycle and not even at the level of monetary liquidity or solvency that ECB or FED can project at its continuance of growth. Zigzag make a better search on the bottom line, and growth only comes after.
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