What is Austerity?
Austerity refers to a strict form of discipline in life. It pertains to extreme measures to be simple and rid oneself of life’s pleasures. In economics, it involves the government’s effort to reduce spending in times of huge financial deficits.
In many of today’s economies, government spending may be cut back when debts become extremely high. Cut-backs may be in the basic social services and other essential things offered by the government to the people. Along with this cutback, more taxes may be imposed or existing ones will be increased to help the government pay for debts. Other governments resort to delaying and/or canceling some infrastructure projects just to save money. The main goal of putting up austerity measures is to balance the economy, but sometimes a particular government may fail in doing so and the result will be a repeat of the cycle to further reduce spending. Austerity measures are usually taken by governments after a period of excessive spending like after wars or during the time when the country’s debts are considered too high or excessive.
But austerity measures may also apply to people in their daily lives. Using the government’s efforts to cut back on spending as an example, a person can also cut back on personal expenses to ensure financial security. The basic concept is to try to avoid spending on unnecessary things and focus on what a person needs to get by on a daily basis. Like if some governments were able to cancel or reduce bonuses to civil servants, a person can also reduce spending on pleasure items. Careful assessment is the only thing that’s needed to save money on travel, eating out, and shopping. One doesn’t have to make a drastic change of zeroing things out, he/she just have to make extra effort to pinpoint which part of the expense list can be managed.
Austerity involves careful review of circumstances to be able to implement activities as planned. Whether it is the government or a basic individual who wants to spend less, backup plans must be in place to counter any negative outcome.