FT pulls apart austerity economics

The Financial Times has this morning produced a blinding set of graphs which highlight how fiscal austerity has negatively impacted on the GDP of various European economies.

The Financial Times (£) has this morning produced a blinding set of graphs which highlight how fiscal austerity has had a negative impacted on the GDP of various European economies.

Essentially, the greater each government’s austerity drive the larger the drop in GDP. Are you listening, Mr Osborne? The third graph (furthest to the right) is the important one (the horizontal line depicts the level of austerity from 2009-2012 and the vertical line shows the fall in GDP.

The coup de grace is delivered, however, by Paul Krugman of The New York Times:

“Austerity was costly for the afflicted economies: the greater the tightening between 2009 and 2012, according to the International Monetary Fund, the bigger the fall in output.”

Thus, FT journalist Martin Wolf adds, “the panic that justified the UK coalition government’s turn to a long-term programme of austerity was a mistake“.

“In the long run, the fiscal deficit must close. In the short run, the UK has the chance to push growth. It should take it. So should the US.”

62 Responses to “FT pulls apart austerity economics”

  1. LB

    Did they?

    They have growth. Why omit them?

    Ah yes, it was they cleaned up their banks by liquidating them. They didn’t socialise the losses like Gordon and his disastrous policies.

    End result, they aren’t paying the price.

    Another point, why have the left off the effect of tax rises. Put tax rises up (35% in the UK) against growth and its an even more stark comparison.

    Put tax levels against growth, and its again obvious. Low tax = high growth.

    All goes back to the debts. 5,300 bn a least omitted from the accounts. Hence the government is taxing everything. Result, consumers aren’t spending.

    Government spend however is up up and away. There are no cuts in spending.

  2. henrytinsley

    Who is Keys or Kenyes?

  3. Bananatwix

    “Government spend however is up up and away. There are no cuts in spending.”

    That’s why where I work has had its funding slashed then… there ARE cuts, they’re just silly cuts though as when they cut them they seem to forget they’ll have to spend somewhere else instead after cutting that… (Example being, cutting jobs = more money to job seekers allowance, housing, ect).

  4. LB

    director of the British Eugenics Society as well.

    Like Beveridge. He was all for bumping off people who were expensive such as the disabled.

    What is it with the left and a desire to kill people? Nazis, communists in Russia, Pol Pot, Mao, …

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