Austerity Has Failed in Europe

Posted on January 30, 2012 at 12:50 pm by Bob Cesca

Shocker!

Bowing to mounting evidence that austerity alone cannot solve the debt crisis, European leaders are expected to conclude this week that what the debt-laden, sclerotic countries of the Continent need are a dose of economic growth.

Economic growth raises all ships — it creates tax revenue and mitigates budgetary shortfalls.

Of course the austerity fetishists here will continue to worship a process that makes zero sense and is, in fact, counterproductive in a slow growth economic recovery. And yada yada yada. How much more evidence do we need before the budget cutters shut the fuck up?

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  • http://www.osborneink.com OsborneInk

    Bob, your question presupposes that the budget-cutters actually respect proof. The only proof they need is their belief system. Economics are as much faith-based as everything else in conservatism.

    • gescove

      Immune to facts. We have the stupidity of austerity policies in a recession being played out for us in real time. Yet we still hear the Republicans bleating about deficits.

  • villemar

    Last week’s This American Life had a great piece on the Euro and it’s problems. The problem is Zee Germans are obsessed about rules (draconian austerity requirements), when in reality they need to throw out the rulebook and take another look at the New Deal & The Marshall Plan.

    • muselet

      I agree with you, but demanding austerity measures is the only way the German government can propose helping Greece (and Spain and Portugal and Italy and …) to its own public without getting lynched. It is, unsurprisingly, not a popular idea, but unless those countries’ finances are propped up, the whole Eurozone goes tits-up. Economists know it, those in government know it, the public doesn’t want to hear about it.

      –alopecia

      • villemar

        Yeah. I did oversimplify a bit, the thing they are most afraid of is inflation, but really they need to loosen up the ECB. The This American Life episode was really helpful, you should check it out if you can.

  • JMAshby

    You can have their supply-side ideology when you pry it from their cold dead hands.

  • gescove

    Who could have guessed that contractionary fiscal policies would result in economic contraction?

  • trgahan

    Like in America, most of European austerity was fueled by notion that an “undeserving entitled them” were getting a free ride/bail out on the backs “hard work of good, honest people.” It successfully changed the “who’s responsible” debate from the financial sector and its government enablers to the poor, the elderly, the immigrant, and the disenfranchised.
    The only good thing about the economies of the western world continuing to flounder is that people are seeing first hand austerity doesn’t work. At least in Europe.

  • andrewdski

    Yeah, that was Sunday’s story. Today’s story is all about agreeing to “tougher new measures to enforce budget discipline in the euro zone…”, while “a number of politicians and analysts said the pledge by the E.U. leaders to create new jobs was mostly empty…”

    In other words, while the talk was that austerity might not be enough, the only action was, wait for it, more austerity. Very troubling.

    EDIT: link to the NYT article: http://www.nytimes.com/2012/01/31/world/europe/eu-leaders-fall-short-of-far-reaching-debt-solution.html

  • priscianusjr

    “… European leaders are expected to conclude this week that what the debt-laden, sclerotic countries of the Continent need are a dose of economic growth.”

    Well how bout dat?

    “How much more evidence do we need before the budget cutters shut the fuck up?”

    Well, I don’t know, but this certainly won’t cut it. After all, you’re talking about Soshulist Yurip. This, may I remind you, is Amurka.

  • ArrogantDemon

    In other “No Shit, Sherlock” news…….