Austerity
Etymology
From Greek austēros, "harsh, bitter, severe," a word first used of taste — something that dries the tongue — through Latin austerus. From "harsh to the senses" it broadened to "stern, self-denying," and modern economics uses it for the stern discipline of cutting a national budget.
noun · /aw-STAIR-ih-tee/
A government policy of sharply cutting public spending and raising taxes to reduce debt or deficits.
What it names
It names the painful trade-off behind budget cuts: shrinking a deficit often means fewer services and slower growth in the short run.
Example
Years of austerity trimmed the deficit but left hospitals and schools stretched thin.
Related idea
Austerity is a fiscal choice — about government spending and taxing — as opposed to a monetary one about interest rates and money supply.