The Austerity Crisis (ny times editorial) What Romney Would Inflict on the U.S.

The Austerity Trap


http://www.nytimes.com/2012/10/24/opinion/the-austerity-trap.html


In Monday night’s presidential debate, Mitt Romney echoed other Republican politicians, saying that under President Obama’s economic policies, the United States is “heading toward Greece.” Mr. Romney was invoking Greece apparently to make the point that deep and swift budget cuts are needed in the United States to avoid a debt Crisis.

That bizarre comment, sadly, is no surprise in a campaign that has parted ways with the facts. The president’s budget, as scored by the Congressional Budget Office, would stabilize the ratio of federal debt to the economy over 10 years.

What is more disturbing is that the comment displays willful ignorance about the lessons of Greece, and such ignorance can only lead to bad policy decisions at home. The lesson that should be learned from Greece is that its fiscal mess has been made far worse by severe budget cuts.

New data from the European Union, released on Monday.....show that countries that have most ruthlessly cut their budgets — Greece, especially — have seen their overall debt loads increase as a share of the economy.

The data provide objective support for what has been clear .... deep government budget cuts at a time of economic weakness are counterproductive, complicating, if not ruining, the chances for economic growth.