EP 641 Does Austerity Really Make Economic Sense?

For more than a century the go to move of governments facing a financial crisis has been the implementation of austerity policies, like cutting wages, decreasing spending on social programs and public benefits as the answer to restoring fiscal health. We’re in such a period now in America where we are pursuing monetary belt tightening to deal with inflation and fiscal austerity is put forward to insure an increase in the nation’s debt ceiling. Our guest, political economist, Clara Mattei, in her book “The Capital Order” posits a provocative thesis that solvency has never been austerity’s goal, but rather it is used to keep sending the spoils of capitalist societies to the makers and entrepreneurs to the detriment of the workers. As our wealth and income inequality grow even more, it’s worth listening to her rarely espoused point of view by either party’s leadership or by the economic brain trusts with whom they surround themselves.