This is from the Mercatus Center’s Veronique de Rugy:
We are told that austerity in Europe has failed. The elections in France and Greece, for instance, are supposedly evidence of people’s opposition to severe cuts in spending. However, the growing anti-austerity backlash against Europe ignores one fundamental point: If there is austerity in Europe, in most cases it hasn’t taken the form of massive spending cuts.
Following years of large spending expansion, Spain, the United Kingdom, France, and Greece—countries widely cited for adopting austerity measures—haven’t significantly reduced spending since “austerity” supposedly started in 2008.
First, France and the U.K. have not cut spending. Second, when spending was actually reduced—between 2009-2011 in Greece, Italy, and Spain—the cuts were relatively small compared to the size of their bloated European budgets. While Italy reduced spending between 2009-2010, it also increased spending in the following year by an amount larger than the previous reduction. Most importantly, meaningful structural reforms were seldom implemented. Whenever cuts took place, they were always overwhelmed with large counterproductive tax increases.
This so-called balanced approach—some spending cuts for large tax increases—has been proven to be a recipe for disaster by economists. It fails to stabilize the debt, and it is more likely to cause economic contractions.
Here’s what I don’t understand: I hear a lot of talk about “stability” from various talking heads. What I don’t hear (at least not from mainstream pundits) very much is talk of market equilibrium. Talking about achieving stability in a market that is massively overinflated from artificial credit expansion is kind of like getting into an argument over which side of the slingshot needs more potential energy but then being surprised that anything moves when one lets go….
Time was when we lived in normal times. Death and taxes. Make and mend. Save and spend. The good life, but the poor were always with us.Murderers were hanged. Niggers were rapidly convicted, and hanged. Eat, drink and be merry: or not, if you didn’t like that sort of thing. Go to church/temple/mosque on Sunday/Saturday/Friday – or not, as you believe wise. Get an education, get a job, get ahead. Get married/laid/have children. Trust the politician/banker/realtor/used car salesman/newspaper/TV channel of “your” choice.
This is now; not quite the same.”Normalcy bias”"The Fur lined Mousetrap” To dream the American dream you have to sleepwalk into the American coma.
Death and more taxes. Make more.Spend more.Make war on poverty. Respect allbiological processes. Enjoy: Make war on Drugs. Fear the infidel.Go to kollege, wise up, work for a bank. Keep on trusting “them” – they have your best interests at heart. Blame the rich, the speculators, the 1% – what have they ever done to help you? Keep whining. Be afraid.
Good night, children. Sleep tight.
Ms Ruby, is another person who does not understand the meaning of the word….
Hear is the title of her works: Fiscal Austerity in Europe Doesn’t Mean Large Spending Cuts.
If it does not mean large spending cuts, why are you using the word austerity….?
I’m not so sure those graphs should have omitted the “inflation” adjustment, as that masks the “hidden tax” paid by the private sector.
Also, it would be interesting to pair those spending charts with “revenue” collected in the same currency adjustment. It would more closely depict the growing debt issue in the public sector for each of the country’s depicted. The public debt issue is the “bully in the room” …. which will resolve itself by further confiscations in the private sector. If the debt is being reduced, that may indicate “austerity”, but it could be “austerity” by those being taxed, or by decreased government spending. Until one can ascertain who is paying the pauper, then we don’t know who is practicing “austerity”.