Austerity has become a household word. It’s been mentioned and repeated so many times that Merriam-Webster’s Dictionary honored the term as its word of the year in 2010 — that’s how many web searches were conducted on the “austerity”.

Fiscal austerity is simply a means by the government to control spending and increase revenue. Presumably, this is done by reducing the amount of money it borrows in order to cut the fiscal deficit, find new and fun ways to raise taxes, while simultaneously cutting government programs. However, this is usually done during tough economic times. Those most affected by unfavorable economic conditions will also be hit the hardest by the newer tax burden and cuts in goods and services.

IBD editorial:

When Republicans took control of the House in January, they pledged to make deep cuts in federal spending, and in April they succeeded in passing a bill advertised as cutting $38 billion from fiscal 2011′s budget. Then in August, they pushed for a deal to cut an additional $2.4 trillion over the next decade. …

But data released by the Treasury Department on Friday show that, so far, there haven’t been any spending cuts at all.

In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That’s an increase of almost 5%. And deficits during this time were $23.5 billion higher.

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From the Associated Press:

Greece is relying on rescue loans to remain solvent. But lagging efforts to tame a bloated budget deficit and enforce reforms are threatening that lifeline, which is conditional on fiscal progress.

Athens is trying to convince international creditors that it deserves to get the next, sixth tranche of money due from a bailout fund. Government spokesman Elias Mossialos said late Monday that Greece will get the bailout money.

Despite over 20 months of austerity and two international bailouts each worth about euro110 billion ($150 billion), Greece’s finances remain in a parlous state.

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The only thing worse than Paul Krugman’s call for even more spending in his article “The Mistake of 2010″ is permitting his ideological bias drive his failure to state the obvious.

His Mistake of 2010 not only rests squarely on the shoulders of the Obama Administration, but Mr. Krugman actually wants the Administration to make things worse by spending even more money!

Mr. Krugman says, “We have already repeated the mistake of 1937. Call it the mistake of 2010: a “pivot” away from jobs to other concerns”.   First, note Mr. Krugman’s use of the word “we” rather than, “The Obama Administration and the Democratic Congress”.

Second, Mr. Krugman has a short memory.  The Administration never focused on jobs.

They spent over a year trying to get a health care law passed rather than attack the jobs problem.  Even worse, the health care law is extremely problematic, hugely unpopular, and filled with loopholes.

The only alleged focus on jobs was the Porkulus bill, which was never designed to stimulate, and has not generated any improvement at all in the unemployment rate.  We’ve already seen countless examples of wasted capital here at BigGovernment.   However, if you really want to be infuriated, pay a visit to Stimulus Watch. There you can peruse exactly how that money has been spent — including the most expensive initiatives and the ones voted upon by site visitors as being the ones they are the least satisfied about.  Note, if you will, the commonality between the items listed in these two categories.  Further take note that most of these are grants to states — which went and created government jobs rather than jobs in the private sector.  Some of you may say that a job is a job.  That’s true to a certain extent.  Then again, a government job is also an expensive job.

Take the $1,479,922,924 grant to Florida State Fiscal Stabilization Fund for Education, which created 13,232 jobs….at an average cost of $111,844.  That does not include costs the state will later bear for pensions.  California?  Same deal, only at a “mere” $82,372 per job.  Clearly, however, something stinks in the great state of Texas, for the $2.177 billion Education grant there created…416 jobs.  That’s only $5,233,173 per job.

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London was just hit by heavy riots as part of a protest against the “deep” and “savage” budget cuts of the Cameron government. This is not the first time the U.K. has endured riots. The welfare lobby, bureaucrats, and other recipients of taxpayer largesse are becoming increasingly agitated that their gravy train may be derailed.

The vast majority of protesters have been peaceful, but some hooligans took the opportunity to wreak havoc. These nihilistic punks apparently call themselves anarchists, but are too dense to understand the giant disconnect of adopting that title while at the same time rioting for bigger government and more redistribution. My anarcho-capitalist friends must be embarrassed by the potential linkage with these angry morons.

Speaking of rage, Paul Krugman is equally dismayed with Prime Minister Cameron’s ostensibly penny-pinching budget. Summoning the ghost of John Maynard Keynes, he asserts that such frugality is misguided when an economy is still weak and people are unemployed. Indeed, Krugman argues that the U.K. economy is weak today precisely because of Cameron’s supposed austerity.

Not surprisingly, the purpose of his argument is to discourage similar policies from being adopted in the United States.

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Related Links:

Quantitative Easing at Least Modestly Successful: Bullard
Meet Britain’s Austerity Chief, George Osborne
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European Progressives are rioting over tuition hikes again, simultaneously proving to be the most in need and least deserving of an education.

Contrast the Progressive rioting mob against the politicians who are facing reality:

Wake up, America. To Progressive revolutionaries, this social breakdown is not a bug, it’s a feature of their long-term vision for overthrowing the entire system. What you are seeing on the streets of London is exactly what America’s most radical Progressive leaders want to see here in the United States.

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From the New York Times:

And as officials frenetically tried to paper over differences among the Group of 20 members with a vaguely worded communiqué to be issued Friday, there was no way to avoid discussion of the fundamental differences of economic strategy. After five largely harmonious meetings in the past two years to deal with the most severe downturn since the Depression, major disputes broke out between Washington and China, Britain, Germany and Brazil.

Each rejected core elements of Mr. Obama’s strategy of stimulating growth before focusing on deficit reduction. Several major nations continued to accuse the Federal Reserve of deliberately devaluing the dollar last week in an effort to put the costs of America’s competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.

The result was that Mr. Obama repeatedly found himself on the defensive.

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In today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the latest GDP numbers, Obama’s fiscal train wreck, and his views on the economy shared this week on the Daily Show.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. You can find our iTunes feed at CoffeeandMarkets.com. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Roubini: U.S. Heading for “Fiscal Train Wreck”
Obama No Longer Bothering to Lie Credibly: Claims Financial Crisis Cost Less Than S&L Crisis
Obama on the Daily Show
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