The Agony of Austerity: the Spanish Results

Spanish Unemployment

Spanish Unemployment

This is what a Great Depression looks like. This is what austerity does. This is what the Republicans want to do to America.

Matthew O’Brien, writing in The Atlantic, called Spain “Beyond doomed.” Paul Krugman writes about austerity having “lost credibility.” Those statements don’t begin to describe the agony.

Spain has an unemployment rate of 27.4%. By comparison, at the peak of the great Depression, the unemployment rate in the United States is estimated to have been between 23.6 and 25.0%.

US Unemployment 1890-2010

US Unemployment 1890-2010

The U.S. unemployment rate, despite the strenuous attempts of the austerity-loving neocons, has remained low in comparison, largely because Congressmen, especially the U.S. Senate, have displayed a bit of economic sense.

Spain’s incredibly high unemployment rate is largely a result of the European community’s imposition of fiscal austerity as a condition to loans. It’s externally imposed. Mark Blyth, writing in Foreign Affairs, nails austerity’s failure:

The only surprise is that any of this should come as a surprise. After all, the International Monetary Fund warned in July 2012 that simultaneous cuts to state spending across interlinked economies during a recession when interest rates were already low would inevitably damage the prospects for growth. And that warning came on top of the already ample evidence that every country that had embraced austerity had significantly more debt than when it started. Portugal’s debt-to-GDP ratio increased from 62 percent in 2006 to 108 percent in 2012. Ireland’s more than quadrupled, from 24.8 percent in 2007 to 106.4 percent in 2012. Greece’s debt-to-GDP ratio climbed from 106 percent in 2007 to 170 percent in 2012. And Latvia’s debt rose from 10.7 percent of GDP in 2007 to 42 percent in 2012. None of these statistics even begin to factor in the social costs of austerity, which include unemployment levels not seen since the 1930s in the countries that now make up the eurozone.

Look. Let’s assume it’s a medical experiment. Let’s suppose you are running a trial of a new, promising medication. And suppose every patient, without exception, to whom you gave the medicine got sicker. In some cases, much sicker. Some of your patients lapsed into a coma. Would you continue the medical trial of the new medicine? That’s what the supporters of austerity are doing. The neocons want to give the austerity patent medicine, the same disastrous gunk that’s half-killed Europe, to the United States until the patient – the U.S. economy – sickens and dies. A physician would have his license revoked. Republicans? They’ll probably be re-elected.

It’s economic madness. It’s insane. And yet the neocons use the idea to tube lock government. What, leeches next?

Please, make it stop.

One thought on “The Agony of Austerity: the Spanish Results

Comments are closed.