How’s That Austerity Thing Working For You?
Just to remember how bad Republican notions that we should cut spending in the midst of a recession, this latest from the Eurozone:
The euro zone economy shrank slightly less than expected in the last three months of 2011, but five countries including Italy fell into recession as the sovereign debt crisis discouraged consumers from spending and businesses from investing. sovereign debt crisisdiscouraged consumers from spending and businesses from investing.
Growth in the 17 countries that make up the euro zone fell 0.3 percent, Eurostat, the European statistics agency said [PDF] Wednesday. But the pain was most acute among smaller countries and in southern Europe — ground zero of the debt crisis.
…“It could have been worse,” Martin van Vliet, an economist at ING Bank, said in a note to clients. The figures “clearly indicate that ‘core’ euro zone economies generally were less affected by the escalating debt crisis than peripheral economies, which seems to make sense given that the financial turmoil and austerity efforts are concentrated in the latter part of the region.” (Emphasis added.)
In case you were wondering whether even hobbled stimulus efforts matter, here’s the context with which Eurostat framed its update:
During the fourth quarter of 2011, GDP in the United States increased by 0.7% compared with the previous quarter (after +0.5% in the third quarter of 2011)…Compared with the same quarter of the previous year, GDP rose by 1.6% in the United States (after +1.5% in the previous quarter)…
There’s lots of specific issues hidden within the aggregate data, so it would be an error to overclaim. But yeah, as far as the data do go, the real world is reiterating a verdict to be read over and over in the historical record. Despite what the Republican presidential field will tell you, or Paul Ryan, or just about anyone in a leadership position over in GOP land, slashing demand in a recession is an astonishingly stupid thing to do.
Image: Gong Kai ,Emaciated Horse, before 1307