Political economist and YouTube sensation Mark Blyth argues that austerity policies are downright dangerous: they reward the architects of the crisis, create political instability and income inequality and almost always lead to low growth.
Why do we keep on trying to cut our way out of this slump? Are our governments simply waging an ideological crusade in spite of all the contrary economic evidence?
European governments have succeeded in presenting government spending as profligacy that has destroyed the economy. The current policy of swingeing budget cuts –austerity- is presented as the only way to get us out of this mess.
But where did all that debt really come from? Not from an orgy of government spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Private debt has now been rechristened as government debt, while those responsible for generating it placed the blame on the state, and the burden on the taxpayer.
Plain-speaking political economist and YouTube sensation Mark Blyth argues that history has shown us repeatedly that austerity policies don’t work. They worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality.
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