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.”

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62 Responses to “FT pulls apart austerity economics”

  1. Alan Rose

    Just shows what a ‘con’ austerity is and most people seem to have fallen for it. The current crisis was mainly caused by the banking sector but ordinary people are being made to pay for it.

  2. LB

    Iceland is missing. Wonder why?

  3. LB

    Bollocks.

    Why has the state left the state pensions off the books? What about all the other debts, off balance sheet?

    Why’s the state spending 150 bn a year?

    Keysian stimulus of 30% of taxation for 4 years. Borrow and spend, just as Kenyes says is the solution, and what happens? Boom and the economy fixed? Nope.

    The reason is the mess is caused by borrow and spend, and the fix isn’t going to be the cause.

    People have been conned and deluded that the nice friendly state is there for them, when in practice its robbing them blind.

  4. cynicalhighlander

    Iceland is missing. Wonder why?

    Maybe because they jailed their bankers.

  5. Superwhit

    I cannot understand how throwing people on the dole can support growth in the economy. People who don’t earn money can’t spend any!

Comments are closed.