The austerity experiment

by Russ Roberts on May 6, 2012

in Budget Issues, Debt and Deficits, Stimulus

John Cassidy writes in the New Yorker:

When the campaign turns to questions of economics, what is happening in Europe should provide Obama with plenty of arguments with which to flay his opponents. Republicans say they want to slash government spending and focus on the deficit regardless of the immediate economic situation. The Europeans have carried out that experiment, and, to say the least, it hasn’t turned out very well.

Really? Which nations in Europe have slashed government spending? I suppose “slash” is an ambiguous term but when you write  that the experiment has been tried, don’t you have to show that spending has at least been cut or reduced, right? Maybe some European states have slashed the growth rate in government spending? Is that what he means? If so, shouldn’t different words be used? And either way, should there be some facts on this “experiment.” The word implies something scientific. But it all appears to be going on in the mind of the writer rather than in the real world

I’d like some facts. I have seen many articles on austerity. I can’t remember seeing any that suggest that government spending in any European country has actually fallen. Yes, there is talk of spending cuts or cuts in growth rates. But I’d like to see the data that shows the cuts have actually been implemented.

How can a thoughtful journalist at a serious publication write that the Europeans have “carried out that experiment?”

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