The "reality-based" community should really try to keep in mind that Europe isn't trying to fight their budget problems with "austerity" as much as they are trying to balance their budgets more energetically than we are. And in their haste to balance budgets (because they want to save the common currency?) they are not cutting spending as much as they are raising taxes:
European spending cuts, the argument goes, have hurt people and are arousing political opposition, while Obama's proposals to keep federal spending at 24 percent of gross domestic product indefinitely are likely to succeed.
Evil Republican spending cuts, in contrast, would deny the economy needed stimulus and wreak havoc on ordinary people.
But the facts undermine the storyline. Veronique de Rugy of the Mercatus Center at George Mason University took a look at what "austerity" in Europe actually means.
What she found is that government spending has increased or not appreciably declined in Britain, France, Italy, Spain and Germany. The only significant spending reductions are in Greece, where the bond market cut off funding.
In the other countries, the big adjustment has been an increase in tax rates. European "austerity" is an attempt to reduce government budget deficits largely by increasing taxes and only to a small extent by reining in spending.
So when you hear from people who want us to raise taxes while increasing spending that we should learn from Europe's "austerity" failures, I hope we really do learn from Europe's so-called austerity program and focus on cutting taxes and cutting spending. If we can simplify our tax code while keeping it revenue neutral, I'll consider that enough progress. That will put us on a better glide path to lower annual deficits and eventually a spending surplus.
Who says liberals don't like faith-based initiatives?
