Saturday, May 26, 2012 | 2 a.m.
For months now, liberals from columnist Paul Krugman to the president and politicians all over Europe have been promoting the concepts that growth is good and austerity is bad.
Not a tough sell, as austerity means less public spending and eventually higher taxes. Growth is good because growth would put more money in people’s pockets with new jobs and, of course, would raise taxes fairly painlessly.
The issue is unfortunately not so clear cut. Austerity is a means to an end, but growth is an end. Naturally, we all want growth, but none of us want austerity. France voted in an even more socialist leader promising less austerity and more growth, and, of course, the battle in Greece is just the same: The people like growth and don’t care for austerity.
Liberals make it sound like the various governments are sitting on boxes of cash, and all that needs to be done is to have the political will to get it out and spend it. In France, the same as here, the politicians say, “No problem. Just tax the rich.” Perhaps, but I don’t think that has been particularly effective at any time, anywhere.
So the world over, politicians are saying, “Just give us a shot and we’ll have growth, not austerity.” Spending money that governments don’t have has never worked yet, but I suspect the world’s about to give it another try. Watch Greece for a preview of the result.