It's an open question. So far, austerity budgets are 0-2 at the polls, as both Greece, and now France, have rejected them. They've rejected them because they don't work. Good night, people, it was those crazy policies that created the problem in the first place. Krugman:
What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist — that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper.
In a contest of money and power on one side and the mass of humanity on the other, normally, I'll admit, you'd bet on money and power. At least, that has been the experience of humanity through history.
The signature achievements of recent history--the Magna Charta, the rise of Democracy, the Declaration of Independence, the Emancipation Proclamation--were attempts to redress this imbalance. One might even add the demise of polygamy, as democratically-minded populations decided that one spouse out to be enough for everybody, and no longer should powerful men monopolize the female population.
In more recently history, the reform legislation of Theodore Roosevelt was a response to financial corruption and the vast imbalance of wealth in the "gilded age." What made Franklin Roosevelt's "New Deal" new? For once, the common people caught a break.
The people have more power than they used to, in other words. Whether they'll put it to use remains to be seen.
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