Keynesian and other liberal economists have been attacking various government’s “austerity” programs. They argue that to stimulate or speed up economic growth, governments should spend without as much regard for holding down budget deficits; many decry the Obama Democrats’ 2009 stimulus package as being too small.

But “austerity” is a label that can cover two different types of policies, as Tyler Cowen points out in his Marginal Revolution blog. One is to hold down spending. The other is to increase tax rates. Both types of policies tend to reduce government budget deficits.

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