Europe Falls Even Deeper Into Recession As Austerity Keeps Taking Its Toll
The economic news in Europe continued to get worse on Thursday, as the Eurozone fell even deeper into recession, contracting by 0.6 percent in the fourth quarter. This is the first time since 1995 that the Eurozone has produced no quarters of growth over a full year:
It marked the currency bloc’s first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, gross domestic product (GDP) fell by 0.5 percent.
Economic output in the 17-country region fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said on Thursday, following a 0.1 percent output drop in the third.
The quarter-on-quarter drop was the steepest since the first quarter of 2009 and more severe than the average forecast of a 0.4 percent drop in a Reuters poll of 61 economists.
Even supposedly mighty Germany saw its economy contract by 0.6 percent. Across the whole of the Eurozone, only Estonia and Slovakia experienced economic growth.
This is more evidence showing that European austerity has been an utter failure. Instead of ushering in prosperity, attempts to slash deficits and debt have actually caused more debt by depressing economic growth. As this chart from Paul Krugman shows, austerity goes hand in hand with unemployment:
But lawmakers in the U.S. still want to follow Europe’s lead, slashing spending while unemployment remains stubbornly high. The so-called “sequester” set to take place on March 1 will cost the country one million jobs, according to the Bipartisan Policy Center. (Thanks to Pat Garofalo and thinkprogress.org for this great article)
How about one more article……..
Republican Austerity Cultists Chant Their Spending Cuts Mantra As They Sink the Economy
There are times when taking a new, untested approach to solve a problem after exhausting all other options is a brilliant idea and often a method of last resort. Obviously, no sane person would deliberately pursue a course of action that experts doomed to failure, and especially if there were living examples of a particular agenda’s failure. After Republican economic policies created a world-wide recession, many European nations imposed harsh austerity measures that have proven to be abject failures, leading Republicans to champion austerity as if results would be different because America is exceptional. If nothing else, one can say with confidence that when Republicans find an economic policy that fails, they are duty-bound to repeat it regardless the consequences.
The latest fourth quarter report on GDP growth revealed precisely what economic experts not working for the Heritage Foundation have predicted for four years; reduced government spending during an economic recovery retards growth. Although the news was not entirely bad, the Republican’s drive to enact harsh austerity measures predictably produced the same results England has experienced as their gross domestic product fell 0.3 percent in the fourth quarter of 2012. The data released yesterday showed that the U.S. economy shrank in the fourth quarter of 2012 also, and the 0.1 percent contraction is entirely attributable to cuts in government spending; precisely as economists have warned for nearly four years. Britain’s conservative government was criticized by the International Monetary Fund for their steadfast, and errant, belief that austerity is the key to economic success despite its failure that now threatens their credit rating. Still, they persist defending austerity in spite of a looming triple-dip recession Republicans are wont to repeat for America in their spending cut frenzy.
America’s private sector is doing just fine, and the good news is that personal expenditures, non-residential investment, and business investment were all up, but Republicans promise to decimate GDP growth by enacting sequestration cuts experts warn will reduce GDP growth by 0.7 percent in 2013 and destroy as many as one million jobs. The Republican’s budget guru, Paul Ryan, decried the sequester cuts and negative impact on jobs during his failed bid for the vice-presidency, and said, ”Now there’s one thing we’re going to have to deal with to make sure we protect jobs around America, and that is these devastating sequestration cuts.” This week, Ryan said “I think the sequester is going to happen-we can’t lose those spending cuts” because “Democrats rejected the GOP’s replacement legislation” that cut the food-stamp program, slashed Medicaid, defunded the Affordable Care Act, and disaster relief, and failed to produce their own Draconian cuts. However, Ryan is lying.
President Obama’s initial deal to avoid the fiscal cliff paired a tax increase on the wealthy with spending cuts of $1.22 trillion over 10 years, including “a new measure of inflation that slows the growth of government benefits,” including Social Security, $400 billion in savings “from federal health care programs; $200 billion from other mandatory programs like farm price supports, $100 billion from military spending; and $100 billion from domestic programs.” Republicans balked at the President’s balanced approach and now Ryan is pushing for austerity that is guaranteed to kill jobs, reduce GDP, and send the economy into a recession; typical Republican goals.
The GOP’s passion for austerity by way of spending cuts and deficit reduction to harm the poor, middle class, elderly, and children may lead one to believe President Obama has not cut spending during his first term, but the facts tell a completely different story. In fact, under the President’s stingy economic policy, “the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II,” and as the Bush wars are winding down and government spending fell, so did GDP, but it is still not enough for Republicans. An economist with the Center for American Progress said, “we know what will happen if policymakers don’t work to scrap the sequester and eliminate the useless debt limit policy: We will have slower economic growth and job creation this year and in the future,” which fits right in with Republican attempts to imitate Europe’s disastrous austerity measures and keep America’s economy barely surviving at best, and falling into a deep recession at worst.
If there were no living, real time examples of conservative governments imposing austerity that devastates economies, one might be think that Republicans were making a last ditch attempt to save the economy, but now that most European nations, and now America, are struggling because of reducing government spending, they could be forgiven. However, the GOP knows precisely what austerity will do to the economy, and as Paul Ryan himself said, sequester cuts will devastate the economy and kill jobs, but the Republicans are going forward anyway. What America’s economy needs, and what every real economist advises, is government stimulus such as the American Recovery and Reinvestment Act that, by all accounts, saved America’s economy and prevented a nation-ending deep economic depression. House Republicans still have not even considered passing the President’s American Jobs Act because they know it will grow the economy and put Americans to work, and with no chance of making President Obama a one-term President any longer, their remaining goal is killing jobs, the economy, and imposing real economic hardship on the American people; a feat they are incredibly proficient at.
(Thanks to politicususa.com for this article)