The Myth of European Austerity

For the past few months, champions of big government have gleefully pointed to Europe as an example of the dangers of so-called “austerity.” Citing the economic woes of welfare states like France and Spain, Keynesian bigwigs like Paul Krugman have asserted that the European “experience of the past two years” supposedly refutes “claims that slashing government spending would somehow encourage consumers and businesses to spend more.” Au contraire.