John Stossel’s latest column takes on the austerity myth. That’s the myth that reducing government expenditures (which is hardly the same as an “austere” state given the vast extent of our federal leviathan) is economically harmful because government must “support” the economy. The problem with that notion is rooted in the elemental fact of scarcity — the bigger the government, the small the private sector. The anti-austerity crowd ignores the fact that there are inevitable trade-offs. It also ignores the facts that government spending is often wasteful or even counterproductive and that once government programs get started, it’s almost impossible to stop them.
People often think that government is somehow above the laws of reality and can’t think clearly about it. So let’s suppose that instead of government, we were talking about whatever church you might belong to. The leaders of this church have been getting very large donations from the members and claiming that they use the money on very important things. Then, donations suddenly drop off by ten percent, perhaps because someone finds out that the leaders are living it up at their expense, going to lavish conferences in Hawaii. If the head of the church were to say, “You people are doing a terrible thing by imposing austerity on us! We need all the money you used to contribute and more. People depend on it,” everyone would see through the phony “austerity” rhetoric. They would understand that the flip side of “austerity” for the church leaders is decreased “austerity” for the members, who also have needs and will probably spend the money not donated in more productive ways.
Think of the federal government that way.
