theatlantic: Austerity Is a Disaster: The Lesson of Europe’s Record Unemployment Euro zone unemployment just hit a 15-year high. German unemployment just hit a 15-year low. What can those of us across the Atlantic glean from this seemingly bipolar state of affairs? That austerity, every economic conservative’s favorite prescription for an ailing economy — the medicine Republicans here in the United States are pushing hard — is an utter disaster.  A few euro zone members, including Germany and the Netherlands, are enjoying a relative jobs boom. And yet, europe’s overall unemployment rate is 10.8 percent. How is this possible? Because of  depression-level unemployment in Europe’s austerity-plagued periphery. […] This should put to rest the notion of “expansionary austerity” — that is, that budget cuts can spur growth by giving businesses increased confidence. It has been an epic, epic failure with interest rates at zero. The more a country has cut, the more unemployment it has. Greece, Spain, Portugal and Ireland have all had markets (and Germany) force them to radically reduce deficits amidst already deep slumps. The result has been even deeper slumps. Joblessness has jumped to levels not seen in advanced countries since the 1930s. Read more. [Image: Eurostat]
View Separately

theatlantic:

Austerity Is a Disaster: The Lesson of Europe’s Record Unemployment

Euro zone unemployment just hit a 15-year high. German unemployment just hit a 15-year low. What can those of us across the Atlantic glean from this seemingly bipolar state of affairs? That austerity, every economic conservative’s favorite prescription for an ailing economy — the medicine Republicans here in the United States are pushing hard — is an utter disaster. 

A few euro zone members, including Germany and the Netherlands, are enjoying a relative jobs boom. And yet, europe’s overall unemployment rate is 10.8 percent. How is this possible? Because of  depression-level unemployment in Europe’s austerity-plagued periphery. […]

This should put to rest the notion of “expansionary austerity” — that is, that budget cuts can spur growth by giving businesses increased confidence. It has been an epic, epic failure with interest rates at zero. The more a country has cut, the more unemployment it has. Greece, Spain, Portugal and Ireland have all had markets (and Germany) force them to radically reduce deficits amidst already deep slumps. The result has been even deeper slumps. Joblessness has jumped to levels not seen in advanced countries since the 1930s.

Read more. [Image: Eurostat]

Greek Default…

Lentas (Crete, Greece): Loutra Bay and Marina
Image via Wikipedia

I think Greece should just default and get it done with. Save themselves, rather than acquire more conditional debt and bailouts from other European Union members only to have to meet “silly” austerity measures, aggressive privatizations (hoping that there are takers) and all of this will still leave them with a poor debt to GDP ratio. There is no immediate growth potential. There is no potential for substantial cost reduction without considering the failure of “The Nation”, its services and its ethos. There is no upside. Sure countries like Germany can put more money into this situation hoping to buy time till things turn around. Its a gambler’s instinct. Greece should be allowed to sink. The uncertainty of the fall out is whats scaring everyone into thinking that they should support Greece and that at some point the global economy will start its upward trend and that the situation would change. At least I am hoping that this is the logic that they are using rather than hoping to achieve a turn around by bailout money as bridge finance till they privatize and austere themselves into oblivion.It will not happen and its devious to think that it will. 

Related articles

Top