[lbo-talk] Purpose of austerity?

[Rick]

I want to thank everyone for this forum and for the answers to my 
queries.  It's much appreciated by this long-time left-winger still 
struggling to understand economic matters.

I read somewhere in the progressive press the suggestion that banks and 
corporations are insisting on austerity in order to free up money to pay 
interest on our loans.  I'm trying to understand this better: what loans 
are we talking about?  How exactly does public austerity free up money 
to pay back loans?  Is it that the federal government, shorn of the need 
to pay for public social welfare programs, can then use this 'saved' 
money instead to pay back loans to banks from whom they previously 
borrowed money?