The GOP is constantly warning of European Socialism and pointing to their wrecked economies to stoke deficit fears,but they aren't telling the truth, those countries went to austerity budgets years ago! President Clinton, the "Explainer in Chief" lays it out here that austerity budgets will make our economy a train wreck as it has all across Europe.
This is what happens when you go on an austerity program before the economy has had a chance to fully recover... the GDP shrinks... unemployment spikes upward... inflation becomes runaway!
If you look at the graph in this report which has the USA, Germany, and the UK in one chart that shows that the US and Germany, who didn't do austerity budgets are recovering from the recession, while the UK is tanking with its austerity program.
UK sinks into double-dip recession
UK GDP shrank 0.2% in the first three months of 2012, sending Britain into its first double-dip since the 1970s
Excerpt:
Britain has sunk back into recession, its first double-dip downturn since the 1970s, piling pressure on the government to soften its austerity drive.
GDP unexpectedly shrank by 0.2% between January and March, following a 0.3% contraction in the fourth quarter of last year, according to the Office for National Statistics. A technical recession is defined as two or more consecutive quarters of economic decline. The figures wrongfooted City economists, who had expected a return to growth, albeit of a meagre 0.1%.
http://www.guardian.co.uk/...
London protest bash government's austerity drive
Excerpt:
Although the austerity program has had some modest successes — the country's deficit has dropped slightly — the U.K. economy has shrunk for three consecutive quarters amid cuts at home and economic turmoil on the continent.
Brendan Barber, whose Trades Union Congress helped organize the march, said that the message of Saturday's protest was that "austerity is simply failing."
"The government is making life desperately hard for millions of people because of pay cuts for workers, while the rich are given tax cuts," he said.
http://finance.yahoo.com/...
Even Goldman Sachs warned about an austerity budget's effects in a "confidential report to key investors" introduced by Ryan and its negative impact on the economy and jobs.
Goldman Sachs: House Spending Cuts Will Hurt Economic Growth
Excerpt:
A confidential new report prepared by Goldman Sachs for its clients says spending cuts passed by the House of Representatives last week would be a drag on the economy, cutting economic growth by about two percent of GDP.
“Under the House passed spending bill [which cut spending by $61 billion],” says the report, which was obtained by ABC News, “the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.”
http://abcnews.go.com/...
It is true that we have a debt problem... but a jobs crisis! The Simpson Bowles commission is getting a lot of lip service in this campaign, but as President Clinton explains they didn't recommend doing deficit reduction right now.
If we use stimulus to create jobs now we can create tax payers who are the solution to the deficit problem when combined with spending cuts introduced over time as the economy heals.
I wish Clinton weren't the only one pointing out the real European folly that is unfolding.