The best evidence in support of Keynesian economics and against austerity continues to be Europe which, rather than investing in the economy, is freaked out about debt and has been actively cutting spending to assuage the freak out.
The contraction in the euro-zone economy steepened in August, an advance gauge of activity showed Friday, and the number of unemployed rose to hit a new record high of more than 18 million, adding to recent evidence the euro zone’s slide into recession is accelerating.
Retail sales fell in Germany, Spain and Greece, illustrating the impact the debt crisis is having on strong and weak economies alike. A rise in inflation throughout the euro zone is likely to tighten household finances and could make it more awkward for the European Central Bank to loosen monetary policy to support growth.
The Eurocoin indicator–which is intended to estimate quarter-on-quarter changes in gross domestic product and is published well in advance of official data–fell to -0.33% in August from -0.24% in July, the CEPR and the Bank of Italy said Friday. That is the lowest level since July 2009, just after the euro zone pulled out of its last recession.
Really wonky for a Sunday hangover morning, but hey — this is massive evidence against the Romney/Ryan plan to focus exclusively on the debt at the expense of investment in the economy. If you want to see American’s future under a Romney presidency, look at Europe.