Sri Lankan austerity combined regressive taxes with rate hikes to produce recession
Evidence
Fiscal austerity took the form of cuts to social spending; the elimination of subsidies on essential goods such as gasoline and electricity; regressive taxation, including an increase in taxes on cigarettes, liquor, and telecommunications; and the extension of taxes to low-income households who had been exempt. Monetary austerity, in the form of raising interest rates, exacerbated an already dire situation of unemployment and job insecurity and led to a recession. — Clara E. Mattei, Escape from Capitalism, 347
Categorization
- DEFINE: Concretely exemplifies the fiscal vs. monetary austerity distinction first introduced in the previous chapter.
- XREF: connects to: Sri Lankan austerity combined fiscal and monetary contraction hitting the poor hardest — Clara E. Mattei, Escape from Capitalism: An Intervention, 347; Sri Lanka’s default prompted IMF-mandated austerity after debt default — Clara E. Mattei, Escape from Capitalism: An Intervention, 346; Fiscal and monetary austerity jointly transfer capital accumulation costs onto working classes — Clara E. Mattei, The Capital Order: How Economists…, 774 (+1 more)
Broader Connections
- Sri Lankan austerity combined fiscal and monetary contraction hitting the poor hardest
#expands(0.92) — Clara E. Mattei, Escape from Capitalism, 347 - Sri Lanka’s default prompted IMF-mandated austerity after debt default
#expands(0.85) — Clara E. Mattei, Escape from Capitalism, 346 - Fiscal and monetary austerity jointly transfer capital accumulation costs onto working classes
#exemplifies(0.80) — Clara E. Mattei, The Capital Order, 774 - Austerity reduces taxes on capital while raising taxes on labor income
#expands(0.75) — Clara E. Mattei, Escape from Capitalism, 146