Basic Income Earth Network (This article originally ran in 2011)
I can’t believe the news. We are in the midst of the worst global depression in 70 years, and the governments of almost every major industrialized country are talking about austerity. They’re cutting government services; laying off public sector workers; cutting pay, pensions, and benefits for public employees—all in the name of austerity and balanced budgets.
This astounds me because we’ve been through it before. We’ve seen what works, and we know that austerity is not the way out of a major depression. Austerity makes depressions worse. To get out of a depression, the government needs to spend money—and lots of it. The lessons of history are clear, and the reading of history I’m going to discuss to make my point is not terribly controversial among economists. Let me explain.Read more
Last week The Intercept Brasil posted an article questioning the wisdom of the Brazilian government’s current austerity program and its proposal to essentially freeze departmental spending (having already implemented significant spending cuts) for a twenty year period by way of a constitutional amendment.
The article makes the case that a twenty year freeze is unprecedented in the global experience, and refers (somewhat positively) to the Canadian federal budgets of the 1990s as good practice models of time-limited budget control.
Basic Income Canada Network’s Alan Gummo has written a response. His edited version is republished here:
A comment to The Intercept Brasil on the Canadian austerity experience
This commentary warrants a much broader historical perspective to convey the whole story of the Canadian experience and inform the present situation in Brazil.Read more