Why Austerity Hurts: The Government’s Budget is Not Like Yours

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Unlike “entitlements,” the word “austerity” has come to mean something akin to “godliness” in modern political circles. And along with austerity goes the concept of running the government’s balance sheet like a personal budget. Everyone, from President Obama to his bitterest rivals, have been known to stick a pointer finger in the air and demand, “I wouldn’t run my family’s finances that way, and neither should Washington!”

When I say I don’t agree, it isn’t with everyone. It’s just with the political soundbite and the conventional wisdom; austerity, for a government facing a growing deficit and struggling economy, isn’t at all desirable. And no, the government should not run its budget in any way like the budget of a home — at least, not in the way politicians and pundits are suggesting. Let me explain.

http://www.getrichslowly.org/blog/2011/08/25/why-austerity-hurts-the-governments-budget-is-not-like-yours/

Definitely worth the read.