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2. What are the arguments against austerity measures during a depression or severe recession?

2. What are the arguments against austerity measures during a depression or severe recession?

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Austerity measures are taken by government to reduce budget deficits by lowering government spending and raising taxes. During recession, government needs to adopt expansionary fiscal policy through which they raise government spending and reduce tax to recover fastly but if they keep on following fiscal expansionary austerity measure, it will be less effective becuase producers would be less reluctant to adopt new technologies of production due to high tax rate they pay which will affect output growth and productivity of labor in long run. It will prevent economy from recovering fully from recession.

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