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Fiscal Fallacies: 8 Myths about the 'Age of Austerity'

This briefing can be accessed in pdf format here.

Four years into the global economic crisis, political and economic malaise continues to besiege the eurozone and the US, the rising Eastern powers are stumbling, economic growth across the Southern hemisphere sputters, and worries of a repeat global economic recession -if not full blown depression- continue to unsettle people the world over.

While different countries and regions have been affected in different ways, the successive waves of the global economic crisis since 2008 have led to an austerity-driven 'Great Regression' in human rights around the world. Massive and prolonged unemployment and job precarity, rising levels of hunger, homelessness and food riots, deprivations in access to adequate health and education, greater income inequality, significant cuts in basic social protections, growing xenophobia and discrimination, sharp increases in suicide rates across Europe, and mounting social disintegration have emerged from the wreckage, undermining not just the realization of human rights, but their very recognition as fundamental norms to guide economic and social policy. Austerity seems to have permeated the core of economic policy-making in many countries across the world, where many governments have reversed their previously expansionary crisis responses in 2009 and 2010 by cutting back through 2011 and into 2012, even in the midst of economic malaise. Cuts have been widespread, including de-funding health, education and other social services, reducing grants to employment services, and in some cases reducing social protection, unemployment insurance and older persons' pensions. These programs are taken as mere collateral damage in the quest for economic recovery, rather than what they are fundamental human rights to which everyone is entitled on the basis of their inherent dignity. While broad swaths of society are affected by austerity measures, evidence shows that women, children, older persons, ethnic minorities, immigrants, people with disabilities and people living in poverty suffer disproportionately. The enjoyment of human rights, in other words, has all too often become the foremost casualty of the 'Age of Austerity'.

Despite evidence to the contrary, several myths plague mainstream debates over the enduring human consequences of the global financial and economic crisis. This briefing challenges eight widespread yet misguided perceptions about economic policy in times of crisis, and suggests a series of human rights-centered economic policy alternatives for governments to urgently consider in order to address the dark flipside of austerity-driven cutbacks'a deepening economic and social rights deficit.

Economic policy is public policy and therefore subject to international human rights law. Economic policy choices are a reflection of a government's efforts to uphold its duties and obligations to human rights, particularly economic and social rights, in accordance with its own constitutional and international treaty commitments. Human rights norms, standards and principles also provide a programmatic framework and operational redlines for economic policy-making. Investing in people in line with international human rights norms and principles is not only legally compelling and morally right. It can also work to pull our economies out of the trappings of ever deeper, austerity-driven recessions-what Nobel laureate Amartya Sen called a "spiralling catastrophe".