How’s That Austerity Working Out?
The National Institute for Economic and Social Research (NIESR) said in its monthly health check that the economy shrank by 0.3% in the three months to December. Against a backdrop of weak consumer spending and a drop in manufacturing output, the estimates from NIESR may add fuel to campaigns for George Osborne to adopt a more radical approach to generating growth.
And then I found this BBC article that mentions:
Last month, Germany’s central bank, the Bundesbank, cut its growth forecast for this year to 0.4% and warned that the economy may have contracted in the final three months of 2012, and may do so again in first quarter of 2013.
The eurozone economy as a whole is already in recession, having contracted in both in the third and fourth quarters of last year.
This is a good thing to keep in mind while you watch the government of the United States play Calvinball with our economy. There is no doubt what the policies everyone seems to be advocating will do – push us back into recession, just like Europe.
Put people back to work repairing the infrastructure and they will have money to spend to increase demand for goods and services. When they are working they will pay taxes which reduces the deficit and strengthens Social Security.