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The Age of Austerity: How Scarcity Will Remake American Politics [Hardcover]

by Thomas Byrne Edsall
3.4 out of 5 stars  See all reviews (17 customer reviews)

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Editorial Reviews

Review

Praise for The Age of Austerity:


"[T]his book makes for timely reading
, given the acrimonious partisanship that has animated the 2012 campaign.... [Edsall uses] his chops as a political reporter (he spent 25 years covering politics for The Washington Post and is currently writing an online column on the 2012 election for The New York Times) to put these developments in historical perspective and to assess how they might affect this year’s elections."Michiko Kakutani, New York Times


"The economic collapse that began in 2008 and its aftermath…has mired us in what Thomas Edsall rightly calls “the age of austerity.’’ What this means, the former Washington Post reporter argues in his eye-opening and hugely important account, is a transformation of US politics into “a dog-eat-dog political competition over diminishing resources.’’ Edsall’s point is powerfully argued…. [H]is book is essential…reading for anyone seeking to understand our broken politics."Chuck Leddy, Boston Globe


"The Age of Austerity is an impressive synthesis of reporting and political science. Eschewing the kind of personality-driven trivia that constitutes so much campaign reporting, Edsall digs deep into the underlying social, economic, and even psychological drivers of America's increasingly polarized political coalitions."Matthew Yglesias, Slate


"[A] serious work…that repay[s] close attention….. Edsall’s book really comes alive…when it turns to the political effects of austerity. He believes that US politics will increasingly be characterised by a struggle for resources…. [S]ober and precise."—Gideon Rachman, Financial Times


"Provide[s] much-needed information and analysis.... Like other overleveraged nations, the US may well be facing Thomas Edsall's 'age of austerity'."—Andrew Hacker, New York Review of Books


"In this erudite primer on the conditions that have brought us to this moment of economic crisis, journalist and Columbia University professor Edsall argues that the U.S. faces a future of diminished resources, and, as a result of partisan intractability, the possibility that we won't overcome current challenges to long-term prosperity.... Providing ample sociological and economic evidence via descriptive graphs and in-depth analysis, Edsall...illuminates hard but necessary truths."—Publishers Weekly


 "I strongly recommend that every sensible, intelligent voter read this book before the fall elections."—Ed Fisher, Morning Sun


Advance Praise for The Age of Austerity:


“Thomas Edsall has written some of the most important and lasting political books of the last 25 years. Here, he deftly places the debates and controversies of the current moment in a broader historical and policy context. And he explains clearly why our economic woes have political causes—a fact that most people don't quite believe, but one that urgently needs to be understood.”
Michael Tomasky, political columnist for Newsweek and the Daily Beast


“Tom Edsall is a tough realist with a large conscience and a brilliant mind. That's why he's one of the country’s most important political writers: he faces difficult truths that others try to avoid and discerns important trends before they become trendy—and before most people even notice them. He's done that again with The Age of Austerity, exactly the right book asking the right questions for our moment.”
E. J. Dionne, Jr., author of Why Americans Hate Politics
 
 
“As economists handicap the odds of a new recession and speculate about a lost decade for the U.S. economy, Tom Edsall offers a troubling vision of American political and social conflict in circumstances of low growth and intense polarization.  To avoid what he dubs a “brutish future,” our divided leaders will have to come together around a plan for renewed growth that is bound to offend the core constituencies of both political parties.  If Edsall is right, the outlook for such an agreement is dim at best, and the alternative is the decline of the United States.”
William Galston, Senior Fellow at The Brookings Institution and former policy advisor to President Clinton


The Age of Scarcity greatly clarifies the current frightening crisis in our politics. Thomas Edsall, one of our major political commentators, sees Republicans and Democrats as competing coalitions of haves and have-nots, locked in brutal battles over the fundamentals of modern American government at a time of severe economic duress.  The stakes for America's future are economic and moral as well as political, and they are as large as they have been since the Great Depression. Edsall's analysis—at once calm and insistent, upsetting and enlightening—is a singularly valuable account of these ugly times.”
Sean Wilentz, Sidney and Ruth Lapidus Professor of the American Revolutionary Era at Princeton University, author of The Rise of American Democracy and The Age of Reagan
 

About the Author

Thomas Edsall is an American journalist and academic, best known for his 25 years covering politics for the Washington Post.  He holds the Joseph Pulitzer II and Edith Pulitzer Moore Professorship in Public Affairs Journalism at Columbia University, and writes an online 2012 election column for the New York Times. In addition, he is a correspondent for The New Republic, and the author of Chain Reaction, a Pulitzer Prize finalist (1992), The New Politics of Equality (1984), and Building Red America (2006), among other works.  Edsall is also the winner of the Carey McWilliams Award of the American Political Science Association.  Mr. Edsall lives in New York and Washington, D.C. with his wife, Mary.

Excerpt. © Reprinted by permission. All rights reserved.

Chapter One

Austerity

In a matter of just three years a bitter struggle over limited resources has enveloped political discourse at every level in the United States.

Pitched battles between haves and have-nots over health care, taxes, union rights, and unemployment benefits—as well as, at a local level, cuts in police protection, garbage collection, and the numbers of teachers—have dominated public debate. A stagnant economy, ballooning deficits, and the mushrooming strength of antigovernment forces are producing a set of wedge issues centered on fiscal conflict and budget shortages to create a new politics of scarcity.

The ranks of the disadvantaged have exploded. A total of 28.9 million American men and women in July 2011 were either out of work or underemployed, including 13.9 million unemployed actively looking for work, 8.4 million classified as “involuntary part-time workers,” and 6.6 million who wanted a job but had given up looking, according to the Bureau of Labor Statistics.

The severity of joblessness and the prospects for finding work have only minimally abated: in June 2011 there were 4.01 million men and women who had been out of work for at least a year, and nine unemployed job seekers for every two job openings, according to the Bureau of Labor Statistics.

Resource competition between Democrats and Republicans now leaves each side determined to protect what it has at the expense of the other. Worklessness and an underfunded safety net are forcing elected officials to make zero-sum choices—or worse, to enter negative-sum negotiations in which gains and losses add up to less than zero.

There are additional measures of distress. Financial pressures on the working and middle classes have escalated, forcing survival strategies that leave no room for sharing with the less well off. Millions of homeowners who were banking on real estate appreciation to carry their education, medical, and/or retirement costs have seen the average value of their properties drop by 21 percent, from $329,400 in March 2007 to $260,300 in early 2011. In July 2011, 11 million homeowners, or 23 percent, were underwater (owed more than their homes were worth) by an average of $65,000, and another 2.4 million, or 5 percent, had equity of $5,000 or less. From the start of the recession in December 2007 to the end of 2010, banks repossessed just over 2.5 million homes, according to RealtyTrac.com.

With the disappearance of defined-benefit pensions from the private sector, a substantial proportion of those approaching the end of their working lives are depending on inadequate or nonexistent savings that will leave them radically short of what they need to get by, according to Boston College’s Center for Retirement Research.

Half of those already retired receive 90 percent or more of their total income from Social Security, which has an average annual benefit of fourteen thousand dollars. “Even before the financial crisis that began in the fall of 2008, Americans were woefully unprepared for retirement. . . . Today, one-third of American households do not have any form of retirement savings plan beyond Social Security. . . . While lower- and middle-income households are least prepared, most Americans—even in middle- to higher-income households—will fall well short of their retirement expectations,” reports the management consultant firm McKinsey & Company. An AARP poll released on February 3, 2011, found that among those between the ages of forty-six and sixty-five, 25 percent had no retirement savings.

Pressures on the Social Security trust fund are mounting. The leading edge of the baby boom generation turned sixty-five in 2011. The average age of retirement has dropped sharply over the past hundred years. With prolonged schooling and increased longevity, the proportion of the life span in which people actually work and contribute to Social Security and Medicare is declining. At the start of the twentieth century, more than two-thirds of men who survived past the age of sixty-five worked. By 1950 that proportion had shrunk below 50 percent, and by 1985 only 16 percent were employed. The result is a transformation of the dependency ratio: “the number of people 65 and older to every 100 people of traditional working ages [20 to 64] is projected to climb rapidly from 22 in 2010 to 35 in 2030,” according to the U.S. Census Bureau.

Compounding these developments, the population of the very poor is also swelling and increasingly turning to the government for help. In 2010, according to the U.S. Census, 15.1 percent of the population was living in poverty, the highest level since 1993 and up from 11.3 percent in 2000. The poverty rate for whites was 13 percent; for blacks, 27.4 percent; and for Hispanics, 26.8 percent. The number of households receiving Temporary Assistance to Needy Families (TANF), the post-1996 welfare-reform program, increased from 2.27 million in 2000 to 4.49 million by May 2011.

Reflecting the increased need for emergency food, the number of food stamp recipients grew from 17.2 million in 2000, at an annual cost of $17.1 billion, to 44.1 million at the end of 2010, at a cost of $69.6 billion, the highest number in the history of the program. The number of food stamp recipients has grown over just the past three years by 61 percent, with the average monthly per person SNAP (Supplemental Nutrition Assistance Program) benefit in 2010 being $133.70. This amount is available only to persons beneath the government’s designated poverty level, who do not have more than $2,000 in liquid assets or own a home, a population currently estimated at one-fifth of all Americans. At the same time, only two-thirds of those eligible under Department of Health and Human Services criteria enroll in SNAP. In 2006, the last year for which there is data, 44 percent of SNAP household heads reported their race/ethnicity as Hispanic or African American.

Medicaid, the program providing health care to the indigent, has grown by 5 million recipients in a decade, from 41.4 million in 2000 to 46.5 million in 2010. Over the course of the next decade, if the Obama administration’s health care reform survives court and congressional challenges, Medicaid will be required to provide essential coverage for everyone at or below 133 percent of the poverty line; this will add an estimated 15.9 million more recipients between 2014 and 2019, at a five-year cost of $443.5 billion to the federal government and $21.1 billion to be paid by the states.

“Getting Something for Nothing”

As the numbers of recipients of government benefits—ranging from welfare, Medicaid, and unemployment compensation to veteran’s benefits, Social Security, and Medicare—have exploded, the potential for political manipulation has become apparent. In June 2009, for example, the publication of a study by the Urban Institute and Brookings Institution Tax Policy Center showing that 46.9 percent of all households paid no federal income tax in the previous year, as illustrated in Figure 1.1, spurred a flurry of conservative political reaction. The outpouring from the right only intensified with the April 29, 2011, release of a Joint Committee on Taxation analysis showing that 51 percent of tax filers in 2009 paid no income tax. Curtis Dubay, senior tax policy analyst at the Heritage Foundation, argued: “We have 50 percent of people who are getting something for nothing.”

Sean Hannity of FOX News raised the stakes, declaring: “You know, we saw stories this week where people were saying, all right, health care, where do I sign up for my free Obama health care? We saw stories this week, 50 percent of American households no longer pay taxes. What does that mean for America if you have a voting electorate that’s not paying any taxes?”

In May 2010, the Tax Policy Center story was followed by a second that provided further ammunition for the GOP and for the nascent Tea Party movement. Figure 1.2 demonstrates a long-term trend that had accelerated sharply with the onset of the Great Recession: the steady decline of private sector earnings as a share of total personal income, accompanied by a steady rise in government transfer payments financed by tax dollars.

By midsummer 2011, Republican presidential candidates were calling for legislation to make payment of federal income taxes mandatory for all workers, targeting the bottom third of the income distribution whose income was too low to meet federal income tax thresholds at that time.

As the economy continued to falter, massive growth in demand for government services threatened to add substantially to the debit side of the government ledger. The 2010 federal deficit stood at $1.3 trillion and was predicted by the Congressional Budget Office to hit $1.5 trillion in 2011. But those figures tell only a small part of the story. The CBO reported that total federal debt held by the public exceeded $9 trillion at the end of FY 2010, or 62 percent of the GDP, up from 36 percent of GDP in 2007, just as the recession began. The ratio of debt to GDP has never exceeded 50 percent except during World War II and the decade afterward. The CBO projects that debt held by the public will reach 101 percent of GDP by 2021, the highest level since 1946, and 187 percent by 2035.

The consequences, according to the CBO, will be disastrous: higher interest rates for all borrowers; more borrowing from China, Germany, and other countries; declining domestic investment; an inability to respond to future recessions; a growing likelihood of new financial crises; higher interest charges on new government debt; and a severely diminished safety net. And if the past is any guide, the potential for global chaos.

Your Loss Is My Gain

The major issues of the next few years—long-term deficit reduction; a graying population (in 2050 the number of Americans sixty-five and older is projected to be 88.5 million, more than ...
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