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”
LB
Clue is in the name. National SOCIALISTS.
LB
http://www.bloomberg.com/news/2011-03-08/iceland-economy-contracts-on-imports-government-spending-1-.html
Iceland’s economy contracted in the fourth quarter as the government spent less and imports grew, offsetting gains in investment and exports.
===========
Hmmm, spending less, produces growth. Now in the UK we have government spending more and more, and taxing the hell out of everyone.
Now, why don’t we try the Iceland approach?
LB
Well, because its costs much less than the cost of employing them on make work schemes.
That means you don’t tax other people. Then they spend and invest more, and you get growth. That growth means more jobs for those that used to work for the state.
Very simple. You just need to make sure you include everyone and not look just at those on make work schemes. Include the impacts like spending people’s pensions so they won’t get one. Include taxes which mean they don’t spend, ….
ie. You’ve got a very selective view, so its not surprising you come to the wrong conclusion.
LB
Shows you why the state is the enemy of people.
The state is just a means of screwing ordinary people. Eg. The welfare state’s consequence is that people won’t get pensions, because they’ve spent all the money.
ONS put the debts at 5,300 bn for pensions. How do you pay that on 550 tax revenues, and 700 bn spending?
That pension by the way is 20% of what you would have received from the FTSE.
Stephen Wigmore
Either that or countries with collapsing economies need to cut more.
You really think Greece’s economy collapsed because it cut? Not that it was forced to cut because its economy collapsed?
You’re a joke.