To put this into a simple perspective, let's say we're in a society of 4 people. 1 of us has a spending problem and can't make ends meet, 2 of us are responsible with our money, and 1 of us is living like a king on borrowed money, and not only is this person borrowing money, they are borrowing that money for gambling purposes. On top of that, this person is fixing their books so it appears as though they are in much better shape then they are.
Now, when the debt collectors come in asking for this ***t-ton of money that they owe. This person comes out and declares, well, since the other 3 helped lend money on expectation of a return, that this person has too much debt and if he goes bankrupt then EVERYONE loses money so they must foot the bill for this persons gambling debts and loans or else the entire "economy" would fail. So, being nice folk, the other 3 throw money in a bailout to 4, who then INSTANTLY takes the money and goes on a gambling binge and now comes back saying that he needs MORE MONEY (to fund further gambling)...
A better way to describe this setup is what is commonly called a "ponzi scheme"... and you, me, and most of the world are the victims in this scheme, and those individuals represented as number 4 in our little hypothetical society, they are the perpetrators of this scam, and well... the politicians meant to represent the people are signing us on as responsible for the "debts" of the one person who should be thrown in jail... actually, this scam is SO BIG that I would argue for capital punishment.
Edit : Your definition of austerity is actually reasonable... but the reality is that not only are services being cut, the cost for the remaining services are going up through taxes.
The ONLY outcome if this continues is that EVERYONE will become debt slaves.