Is “austerity” a good thing?
Depends on how it is defined. Johan Norberg points out that spending restraint is the right approach.
Since I’m a fan of spending restraint, I obviously like the video.
But let’s expand on two points.
First, the definition of austerity is critical. Some fiscal policy folks (at the IMF and CBO, for instance) focus on deficits and debt.
And this means they view spending restraint and tax increases as being equally desirable.
But that’s nonsense. As I’ve repeatedlyexplained, red ink is best viewed as a symptom. The real problem is excessive government spending.
Moreover, higher taxes usually exacerbate the spending problem since politicians can’t resist the temptation to spend at least a portion of any expected new revenue.
And since tax increases generally don’t collect as much money as politicians think they will, you can wind…
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Utopia, you are standing in it! 
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