The answer is the latter in the case of the UK in 2017. There was a time perhaps in 2010/11 when austerity was good, but without making it part of a plan to re-boot the economy and maintaining it year after year, through one parliament into the next, is mathematically pointless, hugely damaging to the lives of everyone not in the ruling class and causes economic blindness to those who practice it for so long. Thus it is we have a government which does not know how to move forward in any direction, because it and its advisers have entirely lost the economic plot and have no idea what they are doing.
May makes her lofty speeches about those left behind and the message of Brexit, but the root cause of all she talks about, including Brexit, is never ending austerity, causing under funding of almost every public function or service upon which taxpayer’s money is spent. This makes everybody angry. Unions go for strikes, prisoners go for riots, some go for protests, but most go for despair. For a very sad few this is all engulfing and life changing or, even worse, ending. But for most it is a creeping feeling that things are never going to get better. The anger, like the magma in some long dormant volcano, is building. If May does not come forward with real plans to enrich people’s life experience in everyday details, that anger is going to burst all over her. And her problem is that there is only one thing which will ease the pressure and she does not have it. Money.
A modern state works best if its two sectors, public and private work in balance and for the common good. There should be every opportunity for the ambitious to forge ahead, provided it is not at the expense of the vast mass who enable the fabric of modern civilization at every level, whose calling is not self enrichment because their jobs can never make them rich, but without whom the lights would go out, the planes crash, the trains fail, the epidemics spread, the floods engulf and the general structure of a modern state would collapse. The majority who work for the common good should be able to get a square deal which shares in rising standards bought about by economic growth and advancing innovation. And they should be able, because many of them run them, to rely on efficient public services and utilities which are modern, efficient and caring.
The current economic model looks after the top end of the professional classes really well and celebrities have never had it so good. Most of their money has first to be earned further down the food chain either to pay them fees, ticket sales or subscriptions or from taxation. And this is where it all goes wrong. Because this mass does not earn enough, while the top people earn too much. Moreover the taxation model is a century out of date and utterly fails to deliver the revenue required. It needs restructuring on entirely different principles to spread the burden much wider, so that it delivers higher revenue at lower rates. It is all possible, my book Turn Left to Power explains.
In simple terms the UK does not have a problem of too much expenditure; it is a problem of too little income. Austerity makes the problem worse. That is what May has to deal with.