So How's Austerity Working out for Europe?

S

Satchel

2,500+ Posts
While US cons are yelling and screaming for similar plans here, it doesn't seem to be working so well in Europe.

Both the United States and Europe suffered in the global recession over the last four years.

The U.S. used stimulus and spending. Europe used austerity measures to reduce spending.

U.S. GDP is forecast to grow at 2-3% this year. Europe? Contraction by about 0.2-0.3%. Debt is a serious problem, but massive spending cuts during a recession are a seriously bad idea that should be delayed until after the recovery is in full swing. Just ask the Euro Zone.
The Link
 
We are on the same path....it's just a matter of time before we have to pay the piper for our socialist, big spending ways.
 
?

GDP slowed to a 2.2% in 1st quarter, weaker than expected
here is an analysis of what contributed to the 2.2%
and the 4th qtr 2011 was revised downward from 3. to 2.8

With inventories high production off forclosures getting ready to spike what growth do you see for the rest of the year?

Only a fool would think we can continue to increase government spending like we have been including yes the last of the Bush years.

So not sure who satch is saying is calling for austerity just like the Euros but it would be stupid to think gov't spending must not come down
 
Didn't Spain set up a socialist government about a decade ago and now has worked their way to 20+% unemployment? Too many free riders doesn't work.
 
Sorry you need everything spelled out BI. We have become a nation that spends too much, taxes too much, expects too much, and projects our military might too much.
 
Sadly enough the answer is in neither mindless fiscal stimulus, mindless tax cuts or mindless austerity. Obviously the economy needs to produce more, reward production, and provide enough tax revenue to maintain our military and social safety net. It's not simple math and even if it were, the politics are vexing.
 
Satchel, perhaps you noticed that Spain's unemployment rate is roughly the same as it is for African American Men.

Keep hoping for change, man.
 
it is interesting that the BO admin urged or warned Hollande to not end austerity measures.
Speaking for BO jay Careny said
"President Obama's spokesman warned the new socialist president-elect of France not to implement his campaign agenda of ending austerity measures, indicating that such a reversal could damage the world economy.

"A balanced approach . . . Both fiscal consolidation and efforts to boost the recovery is the right approach for Europe," White House Press Secretary Jay Carney told reporters today. "That's an approach that he thinks ensures that the recovery continues while putting our fiscal house in order.""


meanwhile Hollande seems headed in the opposite direction with his plans,
"French President-Elect Francois Hollande called for an increase in government spending and taxes. "Europe is watching us, austerity can no longer be the only option," he said upon winning the presidential election."
The Link

?? Isn't that BO's plan as well?
 
Satch,

There's a lot wrong with this analysis. First, you paint with a grossly over broad brush when you say "Europe." Europe is a continent with several nations all with their own economic issues. You can't lump countries like Greece and Portugal (who never had meaningful economies in the first place) with countries like the U.K., France, and Germany that have been economic powerhouses for tens and even hundreds of years.

Second, when you use the term "austerity," what are you talking about? I think you're assuming very large budget cuts, but that's not all that's involved. For example, Greece has also dramatically increased taxes. That's not going to help matters.

Third, I understand the concept of spending a lot of money in economic downturns to protect the economy. Two problems with it though. First, at least in the United States, the spending increases become permanent. We don't cut it if/when there is a rebound. Second, like I said in a previous thread, at least in recent years, we don't spend very productively. Paying out trillions per year to irresponsible businesses and individuals who aren't working isn't productive, whether there's a good reason for their not working or not. I think you could sell people on stimulus better if it actually served the common good.
 
The Europeans are abandoning austerity AND reality. Their governments are bankrupt and they want more entitlements, which they think will come on the backs of the rich. I imagine the wealthy French and their lawyers and accountants are already figuring out ingenious ways to dodge Hollande's 75% tax rate. I don't think any country has ever taxed its way to prosperity.

Instead of following the sane German model, they're plunging ahead with reckless abandon. They may just suck the rest of the western world with them.
 
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