Europe's Fauxterity In Three Simple Charts

thenews 2013.04.27 20:23

Now that the absolutely irrelevant debate over the applicability of the 90% debt/GDP Reinhart and Rogoff hard cutoff for sovereign growth is supposedly over due to an excel mistake of the type that JPMorgan did at least once to misrepresent its VaR both internally and to public shareholders (which to a large group of supposedly people is equivalent to supporting the notion that a record debt global conflagration can only be resolved with even more debt), perhaps the debate can shift to another question: why despite all the bickering and complaints, Europe never actually engaged in austerity, in spending or debt cuts, and that the primary reason the people's plight in the periphery worsened in the past three years is nothing more or less than gross political and governing incompetence?

Exhibit 1: the only two countries in Europe that have actually reduced government spending are Iceland and Hungary (and Ireland has done a good job of keeping spending flat). To everyone else: please complain about austerity louder - maybe it can mask the fact that you never actually implemented any in the first place.