Many experts doubt that it was a good idea to choose austerity as the main means to solve economic problems.
EE. UU. and debts

When Clinton became president and saw the need to reduce the large debt, it opted for austerity policies as those in much of Europe are paying little hopeful. He tried to settle accounts slowly and trying not to hurt economic activity and growth, which is what, the medium to long term, help reduce debts. According to Wikipedia, “positive aspects of his administration were the drop in unemployment, national debt reduction and balance the budget.”Currently, Obama also is more in favor of macroeconomic stimulus of excessive cuts. And the economy seems to be on the right track.

Europe and austerity

Joseph E. Stieglitz, economist and professor, Nobel Laureate in Economics (2001), says that austerity has not taken to any country out of crisis, clarifying that some small countries that launched such measures and recovered, it was because there were other factors that helped, for example, having partners who contributed to improve exports and thus reduce the negative effects of the cuts.

Stieglitz proposes, among other things, raise taxes on the highest incomes, with the proceeds stimulating the economy and generating confidence, coupled with the need to worry about the hardest hit by the recession. Basically, something like Roosevelt did when faced with the great crisis of the day: tried to create jobs and help the poor out of large public investments, thereby, at least (which is little), a great success in social policies.

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Causes and consequences

As for the causes of the current economic problems in Europe, Stieglitz says it’s not true that everything comes from the fact that he spent too much: Greece itself, but Spain had a surplus in 2008. According to renowned economist, took a wrong diagnosis has been wrong also take action. For example, you had to have fostered growth, rather than focusing on reducing debts hastily. Economists know where the solutions should be sought, but you have no political agreements easier to achieve (among other things, that the financial sector has influence in politics and do not see, or not see, that if the economy of the 99 % of people does not improve yours either (by falling consumption, for example).

The case of a people

To understand some things sometimes should be simplified (avoiding distort its essence). Let that existed on Earth only a small town of about 1,000 inhabitants. The banker and the rich people put him hurry the mayor to return the borrowed them, as they begin to fear that they might lose some. The mayor decides to cripple almost every building starts and dismiss many workers. Sure that consumption will fall and the concern of the people of the future will increase, thereby raising council tax by will tend to decline, making it more difficult to pay debts.

The ecological side

While the priority should be the most disadvantaged people, possibly austerity and low consumption have a positive side: maybe they are avoiding some pollution to the planet (which should lead to find a balance between human needs and ecological sustainability) .