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Resolved Question
Which is better? Austerity or stimulus?
about 1 year ago
Best Answer - Chosen by Voters
Austerity is when a government reduces its spending and/or increases user fees and taxes to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is believed to be unsustainable.
Stimulus is economic aid granted by a government to citizens and/or industry to try and spur growth within the economy. It is a tax cut and/or an increase in government spending, so called because it tends to increase aggregate demand and therefore the level of economic activity in the short run.
Which is better? It depends.
In the short-term, stimulus is better. But your kids and grandkids will be paying for it later. But you'll probably be dead so it doesn't matter.
about 1 year ago
Answers (1)
Austerity measures are put in place when a country needs to trim down its sovereign debt while stimulus policies are implemented when an economy is underperforming or in a recession. It's tough to tell which one's better because both are "emergency moves" for a country that's in fiscal or economic trouble. In terms of boosting economic activity, stimulus policies are better than austerity measures because the latter aims to restrain spending.
about 1 year ago
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