The commentary above is succinct and instructive for those still considering the implications of austerity for a society. We the people should be quite careful what we wish for...
- Default is better than austerity. Governments don't function like businesses.
- Governments can default because they do not like the terms of their loans.
- Austerity favors debt holders, not governments.
- When a country's economy contracts, austerity is the worst thing a government can implement. It leads to stagnation.
- A country can default, wipe out their debt, and raise new capital with higher interest rates.
- There's no proof that austerity works.
Source: Indiviglio, D (2011, June 21), Is Austerity Worse than Default? Atlantic.