"Ponzi
austerity is the inverse of Ponzi growth. Whereas in standard Ponzi (growth)
schemes the lure is the promise of a growing fund, in the case of Ponzi
austerity the attraction to bankrupted participants is the promise of reducing
their debt, so as to liberate them from insolvency, through a combination of
‘belt tightening’, austerity measures and new loans that provide the bankrupt
with necessary funds for repaying maturing debts (e.g. bonds). As it is
impossible to escape insolvency in this manner, Ponzi austerity schemes, just
like Ponzi growth schemes, necessitate a constant influx of new capital to
support the illusion that bankruptcy has been averted. But to attract this
capital, the Ponzi austerity’s operators must do their utmost to maintain the
façade of genuine debt reduction."
