Austerity: A Virtue That Could Have Us Paying Twice
Brown University political economist Mark Blyth believes that Britain's use of austerity is a dangerous idea that will ultimately lead to reducing the economy overall. If the United States government tries it, he tells NPR's Guy Raz, the same people who paid for the bailouts are going to pay for austerity as well.
Several countries are hoping that the strategy, which applies spending cuts to reduce deficits, will help pay the massive increase in public debt caused by the financial crisis.
Putting the austerity policy into effect is seen as a wise move by many of the G-20 countries. The G-20 has even backed Great Britain's recent plan to trim their huge budget deficit by enforcing massive spending cuts. Good for the U.K. if it works, but Blyth cautions it can't work for everyone.
What If Everyone Stopped Spending?
Blyth, who is originally from Dundee, Scotland, stars in a new animated video that takes a skeptical look at the plan. He sees the world as a series of balance sheets.