Greek Elections 2012 Show Austerity Fails, Something Only Ron Paul Seems to Understand

Recent elections in France and Greece have centered around the term “austerity,” generally a reference to economic policies which involve cuts in government spending, especially on public sector salaries and social welfare programs. While reductions in government spending are a good thing, the current austerity measures in Europe, and the suggestions for similar programs in the United States, will never be able to achieve the goals of reducing the size and scope of government. 

Government restrictions that reduce the ability of the average person to start a business, get a better job, and save for the future must be eliminated before cutting welfare benefits will serve any purpose other than to anger the masses.

Ron Paul recognizes this fact: In his budget proposals, he has always emphasizes that cutting military spending, corporate subsides, and reducing the regulatory burden must occur first, before we begin to cut back on “welfare” type spending. To do otherwise would leave the poor with no option but to take to the streets. The key to economic recovery is not only reducing government spending, but reducing government power. The average person must be free to earn a living without the massive burden of taxation and regulation that currently favor the largest firms, which can more easily absorb state-mandated increases in overhead than can start-ups and small business.

The current economic slowdown is the result of not only massive debt, but also the long-term effects of an ever-expanding “public sector” that takes revenue from productive business and uses it to pay meddling bureaucrats and violent “law enforcers.” To the extent that “austerity” means eliminating some of these threats to the well-being of every market participant, it is a good thing. Misguided attempts to cut spending on the most vulnerable in society without freeing the economy so that they have alternate ways of making a living is asking for more riots and unrest such as we have seen in Greece recently. 

The reason behind cuts is also important. If cuts are made simply to allow the government to spend the money on paying back international banks rather than an actual reduction in the size of the budget and more money in the hands of taxpayers, they will only hurt the economy. Much of the Greek bailout falls into this category, what is presented as a bailout of the Greek people is in fact a bailout of international banks. These banks bought high-risk Greek government debt, and now want the rest of the European Union to insure their risky investment does not go bad. 

This is the essence of crony capitalism: socialized losses and private profits. It is inevitable in a system in which bankers (at the European Central Bank and the Federal Reserve) control the market for money. Only sound money and a long-term commitment to reducing the role of government in the lives of every person will turn around the current economic crisis. Short-sighted “austerity” is simply more of the same corporatism that got us into this mess.

How much do you trust the information in this article?

Jed Chancey

Jed Chancey is an economics student, writer, and cook from Louisiana.

MORE FROM

Trump’s legal team spokesman resigns after just two months on the job

Mark Corallo is out after just two months as spokesman.

German president signs legislation legalizing same-sex marriage

According to the German president's office, the bill will come into effect on Oct. 1 at the earliest.

‘New York Times’ interview sparks latest wave of GOP frustration with Trump

The President’s “disturbing” comments on Jeff Sessions and Special Counsel Robert Mueller drew sharp rebukes from his own party.

Jordan Edwards’ mother speaks out after Monday’s indictment of the officer who killed her son

“We will not allow Jordan’s death to be another statistic.”

Trump keeps saying he wants to “let Obamacare fail.” How would that happen?

There are several ways the administration could sabotage the law, experts said.

Trump’s legal team spokesman resigns after just two months on the job

Mark Corallo is out after just two months as spokesman.

German president signs legislation legalizing same-sex marriage

According to the German president's office, the bill will come into effect on Oct. 1 at the earliest.

‘New York Times’ interview sparks latest wave of GOP frustration with Trump

The President’s “disturbing” comments on Jeff Sessions and Special Counsel Robert Mueller drew sharp rebukes from his own party.

Jordan Edwards’ mother speaks out after Monday’s indictment of the officer who killed her son

“We will not allow Jordan’s death to be another statistic.”

Trump keeps saying he wants to “let Obamacare fail.” How would that happen?

There are several ways the administration could sabotage the law, experts said.