"We've seen this before" in Europe. Austerity (Germany after WWI) breeds extermism and intolerance.

[Democracyinkind]

2. A minor detail - inflation, not austerity, bred extremism in Germany.

If it was austerity, it was not the kind of neoliberal self-executed austerity that we know today. It was austerity forced upon the Germans by third parties (reperations).

On the other hand, when you look at infractstructural projects on the communal level (financed through public bonds as well) you'll find a significant increase in social spending compared to the German Monarchical State, combined with a tremendous reduction in armaments spending (which is nothing but (economically useless) public consumption).

So yeah - the lesson applies: Scarcity breeds extremism. We should be mindful that not all scarcity is created equally though. A lot of historically contingent paths lead to scarcity among the poor and middle class.