The case against austerity: A conversation with David Cay Johnston

At last month's World Economic Forum in Davos, Switzerland, austerity was repeated like a mantra by bankers, economists and politicians. The idea that governments, like families, must cut back when income declines is so entrenched in the public discourse that few in public office or the media are willing to challenge it. Yet the austerity mantra ignores the basic economic principle that "spending equals income and income equals spending." Cutting spending means income will fall, yet in this election year, our leaders continue to push for firing teachers, firefighters, government clerks and others without heeding the consequences on our economy.