The Great Recession has reopened an 80-year-old debate about the nature of economics and governments’ role, if any, in restoring an economy to health. It echoes a pivotal debate in the history of modern economic thought that took place in London in the autumn of 1931 between John Maynard Keynes, the father of modern macroeconomics, and Friedrich Hayek, protégé of the father of Austrian economics, Ludwig von Mises.

In response to the Great Recession, America, under first George W. Bush then Barack Obama, followed a Keynesian path, pumping two vast tranches of money into the economy; the TARP (Troubled Assets Relief Program), to save banks from bankruptcy; two vast stimuli of public spending amounting to about $1 trillion; a sharp reduction of interest rates; and a long-term program of quantitative easing. The result in the U.S. was a swift turnaround from impending recession leading to persistent if sluggish growth. The European Union and Britain adopted a Hayekian remedy, drastically reducing public spending to cut public debt.

In the U.K. and in particular the Mediterranean members of the E.U., this Hayekian approach has proven to be disastrous. Britain has endured a near triple-dip recession, growth is flat-lining, and the cutting of public services has caused general misery, particularly to those less fortunate. In Europe, the austerity measures imposed by Germany have caused widespread horror in every country except Germany and have not cured the recession, now in its sixth year. In turn, the E.U.’s stagnant economy has depressed growth worldwide.

The intellectual argument between policies of austerity and growth has largely been won by the Keynesians. One by one, key world economic organizations such as the IMF have about-turned. Where they once advocated austerity, they now plead for moderation in paying off public debt and an increase in government spending to bolster growth. The consequences of austerity can be seen in the rioting and protests on Europe’s streets, particularly in Greece and Spain, where an already depressed economy with high long-term unemployment has been made hugely worse. America has avoided such social upheaval.

What will determine whether austerity will persist as the dominant economic policy in Europe and the U.K. will be the extent of the public’s anger at what, in terms of good economic theory, is the imposition by political leaders of wholly unnecessary despair. In the U.K. this can be fixed by the defeat at the polls of the Conservative/Liberal coalition. In Europe the persistence of Austrian economic policies inflicted by Germany will certainly lead to more violent social disorder and a crisis in the politics of the E.U. The rest of Europe will blame Germany—which has done well out of both the Euro and the Great Recession—for its wretched plight. Unless Germany alters course—and there is little indication that German voters are willing to soften their aggressive attitude to their neighbors—continued austerity may even lead to smoldering resentment against Germany and even the break-up of the E.U.

Austerity is likely to prevail in the coming years not because of politics—cutting spending remains a politically difficult thing to do—but because of simple math. We don’t have enough money to continue spending the way we have been.

Our national debt will reach $16.9 trillion this month and already exceeds 105 percent of GDP. That’s right: We now owe more than the value of all goods and services produced in this country over the course of a year.

Worse, that likely understates the true size of our indebtedness. If one includes the full future unfunded liabilities of Social Security and Medicare, this country’s real indebtedness could run as high as $129 trillion. Measured as a percentage of GDP, our total debt potentially exceeds the debt of every country in Europe except Greece.

Right now, that profligacy is being supported by the willingness of other countries to lend us money at absurdly low interest rates. However, that won’t continue forever. Sooner or later, interest rates will rise, and it will become impossible for us to continue borrowing to spend.

Nor can we tax ourselves enough to keep spending. We might pretend that we just need to make the rich pay a bit more, but, in reality, if you confiscated the entire wealth of every millionaire and billionaire in America, estimated at roughly $11 trillion according to the Census Bureau, you would still not have enough money to pay what we currently owe. In fact, the Congressional Budget Office estimates that in order to pay for currently projected spending, we would have to raise both the corporate and the top individual tax rates to 88 percent, raise the rate for middle-income workers to 63 percent, and raise the rate for low-income Americans to 25 percent.

It’s a truism that things that can’t continue forever eventually stop. If we can’t tax or borrow enough to maintain our profligate ways, we will have to stop.

Sequestration is the worst form of austerity because it lumps in bad cuts with good cuts. By cutting the federal budget by $1.2 trillion over the next eight years—in addition to the budget cuts agreed to by both parties in 2011—Congress is risking the country’s fragile economic recovery, creating gaping holes in the social safety net, and reducing our future global competitiveness.

There are several variables that could influence whether or not austerity politics prevails over the next few years. These include a decrease in the long-term debt outlook, a stagnant economy and stubbornly high unemployment, the impending retirement of millions of Baby Boomers, as well as a host of unforeseen domestic and international events.

I’m not a gambling man, so I can’t say for certain how all these different factors will impact the politics of austerity. But what I do know is that the burden of sequestration and austerity will fall heaviest on the most vulnerable members of society while hampering our nation’s ability to compete in the global marketplace.

The shortsightedness of this policy was highlighted just a few weeks ago when Congress sprang into action to ease flight delays caused by Federal Aviation Administration furloughs. But while flights are now moving on time, low-income families at risk of losing housing assistance and senior citizens losing access to Meals on Wheels continue to wait in line for relief. Additionally, sequestration’s $12 billion cut to research and development spending will take the wind out of the nation’s economic sails. In order to get the nation back on the right track, Congress should replace the required across-the-board cuts with a balanced approach to spending cuts and increased revenue.

Austerity and its opposite, stimulus, have both been proposed as solutions to the crises that are ricocheting around Europe and for creating jobs. It is surprisingly difficult to definitively say whether austerity or stimulus is better. The question of what will determine the politics of austerity is easier, though.

Few voters or policymakers are slogging through the massive technical economics literature on the effects of cutting back or increasing government spending during a recession. Many are using the event as an opportunity to further the views they already hold. Those who like big government think it’s obvious that the government should step in and provide what the recession took away. People who want a smaller government think that the government needs to get its hands out of the pockets of working people and business owners so that real growth can happen. Since what is actually happening is a mix of policies, both sides can say, “I told you so.”

The side that will prevail is the side that can muster the most political will. Children and future generations don’t vote, so there will be a bias toward the welfare of people who consume government benefits now. It is a divisive criticism of stimulus that it is short-sighted; however stimulus is indisputably nice for the short run. Stimulus policy also helps a politician who wants to be seen as active and caring. I am not the first writer to point out that the four-year American political cycle rewards politicians who employ short-sighted economic policy. So, regardless of which policy will actually result in a stronger economy a decade from now, the pro-stimulus camp will have an easier time rallying support.

The intellectual debate over government austerity concluded recently with a flurry of evidence showing that premature spending cuts exacerbate economic downturns and stunt recoveries. Ill-timed austerity will weaken economies and expand debt burdens.

The political battle, however, will continue. As I demonstrate in my recent book Lawless Capitalism, a small band of corporate and financial elites hijacked economic and financial policy in the U.S. long ago, leading to the subprime debacle and its aftermath. The crisis was no accident; instead, law and regulation indulged the interests of those holding the highest concentrations of wealth and economic power.

This reality will hold with respect to austerity. Economic science will not determine the outcome of fiscal policy. The need for the most powerful to pay less in taxes (which already hover at a post-war low) and cut social spending will dominate the outcome, as will the heavily government-subsidized megabanks.

Those serious about balancing the budget would attack excessively low taxes for the wealthy and subsidies for the megabanks. The fact that those are literally off the table for the fiercest advocates of austerity suggests their brand of austerity is largely mythological. What they really seek is billions for the wealthy and powerful and pennies for those who benefit from their prior payments into Social Security and Medicare.

Until Americans develop a healthy skepticism of policies benefiting the richest and most powerful, expect government to continue to cater to the needs of the top .01 percent.