This document discusses the debate around austerity versus investment in government budgets. It notes that in the short run, post-war recessions in countries like the US, Germany, and France led to declines in GDP, but countries were able to recover. However, severe austerity policies can risk going past a "fiscal cliff" and hampering long-term growth. While governments must spend on priorities like defense, infrastructure, education, and health, current debt levels mean budgets will be constrained unless policies focus on strengthening long-term growth to boost tax revenues.