Age of Austerity

The term “Age of Austerity” was popularised by British Conservative Party leader David Cameron in his keynote speech to the Conservative party forum in Cheltenham on 26 April 2009, when he committed to put an end to years of excessive government spending.^[1]

In the wake of the United States debt ceiling crisis and the European sovereign debt crisis, M. Nicolas J. Firzli and Vincent Bazi wrote that the year 2011 could mark the end of an era of government engagement in the economy started with the Liberal welfare reforms of Lloyd -George in 1909 that saw a massive deployment of public resources and the advancement of state ownership across (formerly private) industries and infrastructures throughout the Western world (“Folkhemmet” in Scandinavia, “Welfare State” in the UK...), and that the budgetary profligacy of the US and other G7 countries on the domestic front (generous social insurance programs, cheap water and electricity, subsidised housing...) won't be sustainable in the post-2011 "Age of Austerity".^[2]

The Government of Greece was forced to implement austerity to cut back an enormous debt. The large austerity later led to George Papandreou resigning. Silvio Berlusconi resigned in Italy as borrowing costs soared and debt surpassed €1 trillion. He was replaced by Mario Monti who implemented painful spending cuts and labour reforms. True to his word, David Cameron also launched painful, crippling spending cuts and austerity to bring down his country's deficit. Germany and France have also been implementing painful austerity, though new French President Francois Hollande has turned his attention to fiscal stimulus. Enda Kenny, the Irish Taoiseach, has also implemented painful austerity. Portugal and Spain have also been cutting spending. U.S. President Barack Obama under pressure from Republican Party senators set up a super-committee to try and deliver austerity. The committee failed to report, so automatic defence spending cuts went in to action.

See also

• United Kingdom Conservative-Liberal coalition government austerity programme

References