Yanis Varoufakis - From Ponzi Growth to Ponzi Austerity

What do I mean by Ponzi Austerity? It is not just a case of pretend austerity of the sort that we had, say, in the UK under Mrs Thatcher, when education, health etc. were cut back with a vengeance, in austerity’s name, while the public sector’s borrowing requirement grew on the back of a massive expansion of the state’s (primarily centralised, authoritarian) activities (and all in the name of a ‘smaller’ state). No, Ponzi Austerity requires more than that. It requires the symbiosis of:

(a) large scale reductions in public services and a squeeze on the taxpayer (in the name of reining in public finances), and of

(b) a new mechanism for refinancing the debt of one branch of the macro-economy (including bank losses) by creating new unsustainable debts in some other branches.

In short, Ponzi Austerity increases aggregate debt intentionally by shifting it about the macroeconomy in the hope that the public’s eye will be distracted from all this movement, time will purchased by the powers-that-be at the expense of solvency and, in the end, those with the most to gain from taking their money out of the ‘system’ before they inevitable collapse will manage to do so, leaving the hapless taxpayer to pick up the pieces when the whole thing ends up belly-up. One only needs to look furtively at what is happening in Europe today in order to draw the unavoidable conclusion that the austerity practiced in the Eurozone today is perhaps the most glaring case of Ponzi Austerity possible.

From Ponzi Growth to Ponzi Austerity
By Yanis Varoufakis

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