“Richard Ebeling: What is “austerity”? I think most ordinary people, when they hear the word, think that it means that someone has been spending too much, has gotten themselves into unsustainable debt and now has to significantly get their personal finances in order so as not to “go under” – that is, lose their home, be delinquent on their credit cards and face bankruptcy.
The individual has to “trim” his current spending out of income: find ways to cut corners and reduce buying those things that he decides are of a lower priority and which he can get by without. At the same time, he might see if there are any avenues to try to earn some extra income to help take the pressure off their budgetary problems.
But in the United States and especially in Europe, government “austerity” means merely temporarily reducing the rate of increase in government spending, slowing down the rate at which new debt is accumulating and significantly raising taxes in an attempt to close the deficit gap.”