Austerity Measures Are the Proper Response to a Debt Crisis

This topic is really important, incredibly relevant and most importantly, frequently misunderstood. I hope I've been able to clear up a few misunderstandings with this debate. The evidenceIn this debate, my opponent had to prove that austerity measures are the proper response to the debt crisis. While he has provided some analysis as to why he thinks that's true (I'll get to that in a moment), he has failed to present any real-world examples of austerity measures succeeding. We can argue over whether failing economies, such as Greece, are really implementing austerity measures (although I presented a truckload of evidence to that effect in round three, any my opponent only responded by citing the opinions of a few extreme libertarians). We can debate whether Spain, which was held up as a shining example of austerity working in round three (a claim which pro doesn't seem to defend any more after I proved their economy is in fact failing worse than Greece in many ways) will ever see their austerity policies have a positive effect in the future (a claim not backed up by any evidence). We can argue whether Ireland's newfound stability is in fact just the wishful thinking of the single politician pro keep's citing, given the complete lack of data. We could even argue the examples that I brought up, such as hyperinflating Germany or pretty much all of South-East Asia during their financial crisis, although pro has made no attempt to do so. But at the end of the day, none of these are examples of austerity working. Why has pro not provided any? Because there are none. Austerity doesn't work in reality. The theoryMy opponent's theory is that X and I will work to offset the decrease in C during an economic recession. Then I said that doesn't happen because of the Expansionary Fiscal Contraction hypothesis and capital flight. My opponent didn't respond to either of these. Here's the gist of it - when austerity measures are introduced, people are made even poorer unless they can hide their assets, usually in some safe haven in another country. This is because the cost of production increases, causing unemployment. This makes the economy relatively less competitive and less desirable for investment. I explained all this in round two, and my opponent never really engaged with it so I'm calling it conceeded. Just because there are austerity measures doesn't mean investment will happen - in fact, it reduces incentives for investment. Similary, with exports, if production decreases there will be less to sell overseas, meaning less net exports. The effect on the exchange rate will be similary unfavorable. My opponent asserts more countries want to do business with these failing economies - actually the more they fail, the LESS desirable it is to do business with them. Since my opponent didn't respond to my analysis on what elements of economic theory he was missing, he has not been able to defend the theory of austerity. Standard of LivingI appreciate my opponent reminding everyone that the IMF keeps forcing austerity measures on failing economies. I suppose he learnt that from my round two case, where I proved why this is a bad thing. But that wasn't my standard of living point. My standard of living point was a moral case - the end does not justify the means. Pro has refused to answer or even adknowledge this point so I guess I can call it conceeded. So, to sum up what we've got so far . .. austerity is immoral, not backed up by theory, and completely lacking in evidence. Sounds pretty bleak, huh? The solutionI came up with the solution of higher taxes. My opponent liked this so much that he even tried to claim it as his own, but even his own source states they are distinct. It does mention the two are sometimes coupled, but that doesn't mean they're the same. The principal difference is that one works, while the other doesn't. Pro does have a few objections, however. His first objection is that it's just too much money. My main answer is that no economy has ever failed because they've come out of a debt crisis too well. My secondary answer is that in general, it's not too much money. That's because the rich still have a relatively greater disposable income with progressive taxes than the poor - it isn't socialism. What it does do, however, is redirect their funds towards gainful investment into the economy. Pro's second objection, slightly stronger, is that the rich won't be able to spend or invest as much. Again, however, that presupposes a healthy economy. In a debt-ridden sick-as-they-get economy, you'd be stupid to spend or invest large amounts of money (if making money is your objective). That's why capital flight happens. I've explained this all often enough already. Government spending has the same effect on the economy as investment - my opponent's pet C+I+G+NX equation proves that. People are slightly more efficient at resource allocation than the government, so in a healthy economy high taxes are not usually a good idea. But when the government's in a hole, they need a ladder - and the rich are the only ones with ladders. By using the ladder, the rich, the poor, AND the government can escape into a more prosperous reality. ConclusionThe main point, at the end of the day, is that there are alternatives to austerity that DO work. Pro has failed to defend austerity on every level and I therefore believe that the resolution is negated.