Austerity programs benefit the elite 1%

A recent research paper by the political scientists Benjamin Page, Larry Bartels and Jason Seawright compares the policy preferences of ordinary Americans with those of the very wealthy, and the results are eye-opening. The average American is somewhat worried about budget deficits, which is no surprise given the constant barrage of deficit scare stories in the news media, but the wealthy, by a large majority, regard deficits as the most important problem we face. And how should the budget deficit be brought down? The wealthy favor cutting federal spending on health care and Social Security — that is, “entitlements” — while the public at large actually wants to see spending on those programs rise.
You get the idea: The austerity agenda looks a lot like a simple expression of upper-class preferences, wrapped in a facade of academic rigor. What the top 1 percent wants becomes what economic science says we must do.
Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.
And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?


  1. I do not entirely agree with the statement that a booming economy is good for everyone. Not the 1%. The 1% uses the downfall of economy and inflation to take ownership of property by half the price, thus maintaining their status quo. I would even go as far as stating that since the 1% in great part controls the issuance of money from the privately owned Federal Bank of the United States, they control the amount of money, thus inflation and indirectly control the crisis according to their whims.

    The average american seems to want nothing more than a good healthcare system, a salary reasonable enough to make ends-meet and enough to save for old age. The 1% seems to want everything, absolute control of the population and wealth through abolition of free speech and personal liberties. For what? That question still eludes me.

  2. Yes. I trend to agree. I believe, Nobel prize winning economist Paul Krugman was referring to the fact that, although not all, the majority do better during high growth years, the elite do better always and in low economic growth years when the majority does poorly it puts the 1% at an advantage. That’s capitalist power. As the 15th century Medici family said, “Wealth to attain power, power to protect wealth.”

  3. plebsplebius · · Reply

    The book “the price of inequality” spells out the dangers of austerity programs. Just look at every third world country that we “loaned” money to for “economic development”. It ended up being wasted by dictators, the people were left with the bill, and these austerity measures have never worked in those countries.

    Actually, it has worked. It has allowed American corporations to rape those countries of the natural resources, public utilities, and labor. But as for economic development? There’s not a single case study to support the argument that austerity will bring economic prosperity.

  4. No Doubt. Structural Adjustments. The objective was always to load countries and people with crushing debt. To limit development, not to enhance it. It enslaves countries and peoples and empowers the wealthy elite.

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