Smart Development

紧缩传染病

Jun 14, 2013 Isabel Ortiz and Matthew Cummins

纽约—在今年春天的IMF/世界银行华盛顿会议上，IMF口风一变，敦促欧洲国家放松紧缩政策并专注于投资。但是，在这两个多边机构内部，人们在大谈双重标准。

事实上，大部分国家在削减公共支出——在IMF的支持下。因此，尽管北方国家开始质疑紧缩药方，南方国家（包括南欧国家）正在日渐采取财政调整措施。

据IMF的预测，有119个国家2013年缩减了预算（相对GDP），其中四分之三是发展中国家（包括21个低收入国家和68个中等收入国家）。财政整合影响了约80%的发展中国家人民，到2015年，其影响面预计还会稳步扩大。在此期间，收缩幅度将相当大，发展中国家大约四分之一将把支出削减至危机前水平。

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.

As a registered user, you can enjoy more PS content every month – for free.

Already have an account? Log in

Subscribe to PS Digital

Access every new PS commentary, our entire On Point suite of subscriber-exclusive content – including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More – and the full PS archive.

Subscribe Now

Isabel Ortiz

Writing for PS since 2008
7 Commentaries

Isabel Ortiz, Director of the Global Social Justice Program at the Initiative for Policy Dialogue at Columbia University, is a former director of the International Labor Organization and UNICEF, and a former senior official at the United Nations and the Asian Development Bank.

Matthew Cummins

Writing for PS since 2012
4 Commentaries

Matthew Cummins is an economist who has worked at the United Nations Development Programme, UNICEF, and the World Bank.

new comment has been posted. new comments have been posted.

0 Comments on this paragraph, 25 Comments on this article

Leo Arouet Jun 28, 2013

Gran artículo. El FMI como siempre recetando ajustes impracticables; sólo busca el deterioro de los países más que su bienestar. Stiglitz ha confirmado cómo el FMI ha perdido a Rusia, los países asiáticos y latinos... En fin, el FMI es perjudicial para la gran parte de los países en desarrollo, pues sus políticas permiten luego explotar a los países debilitados con sus inadecuadas e insanas reformas...
A new reply to this comment has been posted.
James Edwards Jun 17, 2013

Austerity does not work. It has been tried back in the 1930s with disasterious result. The austerity economists left out one problem when the thinking is when government spending decreases, the private sector would step up their spending. As Mark Blythe has stated in the "Austerity Delusion", when people are faced with potential loss of income from their job, the natural reaction is to stop spending. What you have here is the result: higher debt and lower GDP growth along with the political will in push it even further knowing full well it is a delusion.

Even UK is in its 3rd recession and Cameron is using EU as scapegoat to shift blame from his policy miscalculation.
- Mark Pitts Jul 12, 2013
  
  James, I agree with you.
  What I don't understand is why the New Deal is considered a success by anyone. WWII, not the New Deal, is what finally got us out of the depression.
  A new reply to this comment has been posted.
- James Edwards Jul 12, 2013
  
  Mark Pitts,
  
  The New Deal came about when you have Hoover telling everyone that the "good times will come back" and makes that a promise that never panned out. Naturally, people decided to tune him out.
  
  A large part of the damage came in reaction to the many policy prescriptions that became ineffectual. Adding to the fact there were no safety net. Many had deposits that disappeared in an instant leaving you with nothing. Imagine that you had $100,000 (this was result of the stock bubble in the roaring 20's) and your bank closed down leaving you with nothing.
  
  FDR had to do something to show the voters that he's doing something which is why he was elected 4 times.
  A new reply to this comment has been posted.
- Mark Pitts Jun 23, 2013
  
  Look at how well gov't spending (via the New Deal) worked in the last serious downturn. The US was in recession/ depression for about 12 years.
  A new reply to this comment has been posted.
- Adam Harper Jun 17, 2013
  
  Wrong. What "didn't work" was governments ignoring spending limits, piling up obscene amounts of debt. What "didn't work" was crony-capitalist policies of socialist-by-practice' regimes giving out bad loans to their friends and donors. What "didn't work" was ignoring the problem until independent international investors responding by paring back on loans. Austerity is not the problem, and it is not the solution. Austerity is the RESULT. It was as unavoidable as a man jumping in the air is to eventually coming back down.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Carol Maczinsky Jun 17, 2013

The development expenditure idea is a nice arms chair proposal but all of this is not feasible when you are on the hook.
- Gunnar Eriksson Jun 17, 2013
  
  Yes; on the hook, but it is time to get off the hook as it consist mainly of language, sentiments, paid lobyists and media control.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Zsolt Hermann Jun 16, 2013

This in an important paragraph, and it is partially true:
"...Ours does not have to be an age of austerity; governments, even in the poorest countries, have options to foster a socially responsive economic recovery. These include, among other measures, debt restructuring, increasing the progressivity of taxation (on personal income, property, and corporations, including the financial sector), and curbing tax evasion, the use of tax havens, and illicit financial flows..."
It is true we do not have to live with "austerity", and there is an option to foster socially responsive economic "recovery".
But for that we have to change the whole system, and most of all we have to change ourselves, how we relate to each other and how we live our lives.
If we stay within the framework of the present socio-economic system that is collapsing day by day, no measures, solutions, adjustments can save humanity from large scale riots, catastrophes even world wars.
If we continue to relate to each other through ruthless, exploitative competition, if each and every calculation is still based on self interest, if we ignore all the scientific data that constant quantitative growth is impossible in a closed and finite natural system, we have no hope for a sustainable future.
Since humanity has evolved into a global, integral, and as a result fully interdependent network, only by mutually cooperating, mutually complementing each other can we survive.
And since we still exist in the same natural system we evolved from, with all the laws of general balance and homeostasis still binding us, only a lifestyle, economy based on available resources and not on excessive, artificial demand can be sustainable.
A new reply to this comment has been posted.
Gunnar Eriksson Jun 16, 2013

The "Ours does not have to be an age of austerity" is an important statement.
The need for reversing the blatant dislocation of the means we have is imminent also in developed countries. Wage increases for the lowest paid workers should return growth and optimism.
A substantial wealth tax should be a basic formula for reversing the dislocations.

A wealth tax with intelligent valuation of capital usage should make it possible to both invest in prioritized areas and reduce debt. The tax should be aimed for idle capital, capital that mainly create speculation bubbles.
A new reply to this comment has been posted.
Frank O'Callaghan Jun 16, 2013

The financial crisis was caused by the unreasonable enrichment of the already wealthy. Austerity is the attempt to balance these books by taking unreasonably from the rest.

Both parts of the policy have caused great harm to the working of the economy with huge, cruel and unnecessary misery to very many.
A new reply to this comment has been posted.
Alex D. Jun 15, 2013

This is a nice article!

Austerity is a proof that our western world is stuck in political crisis.

Remember. The financial crisis was caused by some banks that went too crazy. The collapse on the market caused the economies too shrink. Because many banks were saved the government debt went up.

The question then was, who has to pay for it? Almost everywhere on this planet the answer was simple. The tax payer! So they came up with austerity. But nothing has changed to the people who benefited from the big boom before the crisis.

The banks are still doing what ever they want. The wealthy people are still wealthy also because of monetary expansion by the central banks.

So only the tax payer has to pay the price. It seems that it is easier for politicians to hurt the tax payer than the wealthy people or banks or big companies.

At this point we don't even have to argue if Austerity works or not. At this point it is about Democracy. And from that point of view Austerity only for the tax payers is wrong!

Looking at the South of Europe and how things are going you don't have to be a Professor to realize that Democracy is at risk since there is not even a sign of a recovery!

People like Michael Heller who live in their own little world might be right with their conclusions when they look at some Excel sheets but Democracy is not about some numbers or some calculation. It is about people and that is missing completly in this discussion about Austerity!
A new reply to this comment has been posted.
Adam Harper Jun 15, 2013

When will people understand that when debt reaches unsustainable levels causing the international investing community to cease lending, austerity becomes a simple fact of life, not a policy choice? Austerity can certainly be harmful if mismanaged, which is why debt-addled nations dropped the ball when they failed to use their intimate knowledge of their home country and domestic economy to properly oversee debt reduction, and instead subjected themselves to the decisions of those more ignorant of situation.
- Tomas Kurian Jun 15, 2013
  
  International investing community can go nuts, but central bank will (should,must) not. Thats the point of having well equiped central bank - as a final backstop against ignorant investing community, who decide to stop the wheels turning.
  
  Austerity solves nothing, as it is impossible to cut down
  debt / GDP that way. Not by a single cent. Only monetary policy can achieve this ( + fiscal policy, even better)
  
  Debt is a reflection of individual savings and profits hoarded. Without state deficits, such savings would not be possible.
  If you want to cut debt ( without monetary policy) you are in fact advocating cancellation of people´s savings.
  Nothing wrong with that, as a theoretical policy option.
  
  But if this is what you advocate, why to do it by austerity ?
  Why millions of people should lose their jobs, industries go bust, societies be ruined....?
  Just do a once off tax on deposits ( a la Cyprus) and repay the portion of state debt you want to see reduced.
  Business will go as usuall, without recession.
  
  When will people understand that state debt = personal savings ?
  
  You want to get rid of first, you have to be willing to give up the latter.
  
  Why it is so, you can read at: www.genomofcapitalism.com,
  economic theory which explains state debt origins & profit creation sources.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Steve Delvecchio Jun 14, 2013

[1] GDP=Federal Spending & Investment + Private Spending & Investment - Net Imports
[2] There are only three ways to stimulate economic productivity (National Income/GDP)
a. bank lending (TEMPORARY creation of $$$ , as bank loans of course have to be paid back) Currently in the USA due to continued private sector deleveraging, bank credit is not an adequate stimulus.
b. current account balance surplus (Trade surplus) Currently in the USA there is a massive trade DEFICIT.
3. government spending (creation of net financial assets) Due to private sector drag the only way to increase GDP in the USA is to lower federal taxes or increase Government Spending. NOTHING ELSE WILL WORK.
[3] At least 63 developing countries are considering raising consumption taxes, such as the value-added tax. These are put on basic foods and household items in order to further impoverish the lower classes, thereby widening the gap between them and the rich.
Even “progressives” defend the lies.
[4]Social unrest is indeed increasing, but the shortages turned out to be in money, caused by gratuitous austerity. Around the world, the rich are imposing austerity in order to increase the gap between themselves and their “inferiors.”
A new reply to this comment has been posted.
Brett Blake Jun 14, 2013

FYI: The sequester in the US is likely to shave 0.5% to 2% off GDP, which should certainly be a big confidence booster.
- Adam Harper Jun 15, 2013
  
  I agree with Mark.
  A new reply to this comment has been posted.
- Mark Pitts Jun 14, 2013
  
  ???
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Mark Pitts Jun 14, 2013

It is pretty clear that the authors have never studied economics / finance, or why people hire and invest.
In effect, they say that governments can and should just make all the problems go away.
Ahh, if only life were so simple...
- Adam Harper Jun 15, 2013
  
  @brett. Naturally, you would only base your decision on taxes if taxes made you insolvent. Not sure what that has to do with the article...
  A new reply to this comment has been posted.
- Mark Pitts Jun 14, 2013
  
  @Brett, not following you. You agree or disagree?
  A new reply to this comment has been posted.
- Brett Blake Jun 14, 2013
  
  I, on the other hand, got four startups off the ground. You going to tell me why we hired? Hint: taxes & government spending had absolutely no role to play.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Michael Heller Jun 14, 2013

It's interesting to see the faces of two detached cloud cuckoo land leftwing bureaucrats whose phenomenally high UN salaries we support through taxation dollars. This utopian international bureaucracy has been a leech on the world for far too long. If they would update their outlooks and read a little outside of their internal memorandums, all to the good. Otherwise, what pressure can be exerted?
- Michael Zanette Jun 16, 2013
  
  I thought we were supposed to attack the argument, not the individual(s)..
  A new reply to this comment has been posted.
- Alex D. Jun 15, 2013
  
  At least she does not live in a dream world, eh?
  A new reply to this comment has been posted.
A new reply to this comment has been posted.