Sunday, August 18, 2013

Austerity, Sub-Prime Lending, and the Safety of Savings Accounts

Austerity has not worked well in the EU if you ask Keynesian economists and supporters; they will tell you that austerity does not work, citing the EU experience. Italy, Greece, Portugal, Spain, and the U.K. governments claimed that austerity measures resulted in stratospheric unemployment rates and slow economic growth.
Jeffrey Dorfman, using data from Eurostat, the official statistics agency of the European Union, and calculating government spending in EU countries between 2008-2012, found that only eight of the 30 countries listed have actually reduced government spending (austerity), most prominently Iceland and Ireland. The elected officials responded to rallies, protests, sit-ins and strikes, by spending more money to appease the masses.  Dorfman reported that the average spending increase has been 4.9 percent, with Greece at 8.3 percent, Spain at 13.3 percent, and Portugal at 5.8 percent. In European countries which have reduced government spending, Iceland, Ireland, Bulgaria, Latvia, Lithuania, Hungary, Poland, and Romania, their specific austerity measures have worked. Dorfman concluded, “Austerity cannot have failed in countries where it was never tried.”

http://canadafreepress.com/index.php/article/57279 

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