What America Should Learn From Greece

What America Should Learn From Greece

Austerity is a disaster for the vulnerable—but it's the result of runaway spending, not forward-looking belt-tightening

Greece and the European Union may have temporarily staved off disaster. But while economists agree that structural reforms are the right long-term decision, many worry that austerity will impose considerable short-term pain on Greek citizens and further depress the country’s struggling economy. Signs suggest that financial markets and big business would welcome the agreement, but ordinary Greeks will continue to pay a heavy price as the Greek economy continues to contract.

What can America learn from this? At first glance, liberals and conservatives seem to draw opposite lessons. The left sees the Greek disaster as evidence that austerity and belt-tightening are unfair and painful. Meanwhile, the right sees the disaster as a lesson in the need for fiscal restraint and the dangers of big deficits.

Both arguments get something right. First, as I explain in my new book The Conservative Heart, blunt austerity is disastrous for the most vulnerable. Suicides have spiked in Greece since the financial crisis as unemployment rates have surged upward. Rates of homelessness and food insecurity have risen. Just last week, the New York Times reported that many social welfare programs have been a casualty of Greek spending cuts.