One may question the practical economic wisdom of reducing budget deficits too quickly, at least where the government accounts for so large a proportion of economic activity that drastic reductions in government expenditure might lead to a serious collapse of aggregate demand. (The fact that government expenditure should never play so important a role in any economy is not a valid objection: we always start off from where we are actually rather than where we would have been had we been wiser.) The question of the speed with which a government budget deficit is reduced, therefore, and the means by which it is done, is another of those many questions about which reasonable men may and do disagree.
But to call the attempt to balance a budget ‘austerity,’ in other words to say living within your means implies ‘rigorous abstinence, asceticism,’ a kind of killjoy puritanism, is to suggest that it is both honest, just and decent to do otherwise. And this is indicative of a revolution in our sensibilities.
In fact, it is grossly dishonorable to live beyond your means, at least when you transfer to the cost to others, as is inevitable when borrowing becomes an entire, chronic way of life – as it has in many countries. Then repayment becomes impossible and is known in advance to be impossible; you continue to borrow so that you may continue to live at a higher standard of living than your earnings justify, in the full knowledge that you will either eventually default or, metaphorically speaking, pay back in tin the weight of what you borrowed in gold. Perhaps those foolish enough to lend to you in these circumstances deserve to lose some or all their money; but there is no disguising the fact that, at least according to traditional standards of morality, your conduct has been dishonorable, immoral and fraudulent.