Austerity is, then, a dangerous idea because it ignores the externalities it generates, the impact of one person's choices on another person's choices, especially for societies with highly skewed income distributions. The decisions of those at the top on taxes, spending, and investment prior to 2008 created a giant liability in the form of a financial crisis and too big to fail and bail financial institutions that they expect everyone further down the income distribution to pay for. “We have spent too much” those at the top say, rather blithely ignoring the fact that this “spending” was the cost of saving their assets with the public purse. Meanwhile, those at the bottom are being told to “tighten their belts” by people who are wearing massively larger pants and who show little interest in contributing to the cleanup.

Mark Blyth, Austerity, loc. 62