what is austerity 
the term austerity refers to a set of economic policies that a government implements in order to control public sector debt governments put austerity measures in place when their public debt is so large that the risk of default or the inability to service the required payments on its obligations becomes a real possibility the goal of austerity is to improve a government s financial health default risk can spiral out of control quickly and as an individual company or country slips further into debt lenders will charge a higher rate of return for future loans making it more difficult for the borrower to raise capital 