“Austerity,” once a word used only in very bad jokes about the name of a country to the south of Germany, has become perhaps the buzzword of 2011, if not in America, then certainly in Europe. Governments from Greece to Britain to Spain have slashed their budgets in an effort to cut deficits, boost economic growth, and provide Will Shortz with new material (16-down: puritanical budget cutting).

America has not been immune from the austerity craze, either: as employment has plummeted, GDP (gross domestic product, essentially a measure of how much the country is producing) has remained stagnant, and poverty has hit the highest levels ever in the modern era (more on that in another post), Messers Paul Ryan (R-WI), Joe Lieberman (I-RI), John McCain (R-AZ), etc. insist that the solution is to spend less money on normal people. Yes, it’s true that according to traditional economic theories, large deficits should be avoided during times of prosperity, but I have never heard of a textbook that advocated trying to cut the deficit while we’re in the middle of a recession. That’s just silly.

Silly things have a habit of getting named, however. Take hippopotomonstrosesquipedaliophobia, the fear of long words; that’s pretty silly. Austerity is a rather shorter name for a much sillier concept: cutting the budget anywhere you can whilst ignoring the socioeconomic effects.

I’d like to take a moment for those of you who have already decided that I’m a dirty socialist who can’t be reasoned with. I’m an economics major. I believe in a free (fair) market, in a balanced budget, and in providing equally for all human beings. If you disagree with me, please keep reading. You are absolutely entitled to an opinion, and this is mine. I’ll let you direct most of your anger at Paul Krugman, though.

Federal Reserve Board Chairman Ben Bernanke and President Obama have been (attempting) to buck the global trend by introducing spending measures designed to kick-start the economy, but suggesting to this Congress that we raise taxes or spending is a little bit like trying to talk sense into a four-year old who’s peed his pants on purpose and is plugging his ears and shouting “I’M NOT LISTENING!” over and over.

As a college student, I want to focus on how the austerity measures of Greece, France, Germany, Spain, the United Kingdom, Italy, Portugal, Ireland, the United States, Japan, and many, many other countries, representing approximately 40 million students in tertiary education as of 2010, according to the European Commission. Sure, we might lose some scholarship money, but what are the long-term effects? What will the world look like after the austerity measures of 2011 and the Classes of 2012, 2013, 2014, and 2015 make their marks on that world?

We can answer that. Or at least, we can make an educated guess (and isn’t that all that Sherlock Holmes does?).

Austerity, at least in the US, looks set to affect almost every dollar of funding in every budget in the country. In 5, 10, and 15 years, when today and tomorrow’s college students are graduating from undergraduate and, in some cases, graduate school, they will be looking around to find the career — and the country — that provides them with the most economic utility. In other words, they want to find a high-paying job in a country with good schools, safe neighborhoods, and affordable health care. If the US continues this march towards complete fiscal austerity, we won’t be that country, I guarantee you. We won’t be able to pay teachers, hire cops, or subsidize health care.

Let me give you an example: Jane has just graduated from Tufts with a degree in economics. It’s 2020 and the US is still doing the whole austerity thing. Jane is offered two jobs, one in Houston and one in Vancouver. Both jobs pay about the same, but in Canada, Jane gets free health care and free child care for when she and her fiance have kids. Jane also knows that her kids will walk to free, high quality schools where the zoning laws don’t allow guns near school grounds (the US had to cut out most of its public safety budget in favor of private citizens’ firearms).

Yes, it’s an extreme example, but economists have been talking about a “brain drain” (or “human capital flight,” if you want to be fancy) for decades, and austerity will just accelerate it. This example illustrates that acceleration.

Rising unemployment rates have made up much of the recent economic concern, and with good reason: workers are the economy. Most of the job losses so far have been in unskilled trades like construction and services, and (relatively) little has been lost from skilled industries like IT, health care, oil extraction, banking, etc. (see chart below). Wait, is that a pattern I see?

Chart by Jay Livingston

What do the career groups on the left have in common? What do those on the right have in common? If you answered that the industries on the right require no tertiary (university/college) degree, and those on the left do, you’re RIGHT!

People with college degrees aren’t being fired quite as much; awesome. So what?

So, we come back to my original question: what about the long-term? I will commit one of the several deadly economics major sins and misquote John Maynard Keynes: “In the long run, we’re all dead.”¹ Indeed, in twenty years’ time, many of the people who spent 40 or 50 years gaining the education and experience to become mining experts, doctors, financial advisers, or college professors will be, unfortunately, dead. My point is simply that, in order to keep current college graduates in the US (or the EU or Japan or wherever), we cannot institute financially ruinous austerity policies that will drive those people who do not need social services (people with college degrees, in general) to Canada, the UK, New Zealand, Sweden, or other slightly more sane nations, and will increase the population of those who do need social services (people without college degrees and without the ability to move to Canada).

Austerity, in the long-term, will drive down the college-educated population in the US, drive down the quality of life, and upset the balance between skilled-labor jobs and unskilled-labor jobs that our economy has maintained since the Great Depression.

¹Keynes actually said, “The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.” from A Tract on Monetary Reform (1923) Ch. 3

• This post was originally hosted on the Tufts University blog Jumbo Talk