The only thing supporting austerity is actually a morality play.. there's zero examples of its long-term success if data isn't cherry-picked. How's that quadruple-dip recession in England working out? Spain's unemployment is 60%. UNTOLD RICHES! This is the new version of the old morality play that was quoted by Hoover at the beginning of the Great Depression -- "liquidate labor, liquidate stocks, liquidate farmers" etc.

If the theory is Conventional Wisdom? It sucks. If theory doesn't explain reality.. time for the theory to go. The Euro is an ongoing object lesson in precisely what happens when idiots attempt to shoehorn erroneous economic theory into the real world: The unfounded theory gets smacked upside the head with a clue-by-4.



Not true at all. Default happens all the time, and doesn't even prevent the next issuance of debt. Don't like it? Prove it does actually happen -- don't just assert it.

Oh, and as to "all the time" -- Want to bet that there's more than zero examples of countries defaulting and still getting their next issuance purchased? :)


Why is unverifiable assertion enough to believe that austerity is good.. but at the same time it's just so tough to believe that a country could default and still get its next issuance purchased?

Here's the link to the paper debunking R&R:
http://www.peri.umass.edu/...aa6388b1/publication/566/
The fundamental conclusion of the people who corrected R&R's work for them? ZERO DIFFERENCE in growth rates between countries with low debt/GDP and those with high.

Unless your fundamental goal is to rape countries' natural resources for the benefit of a few hundred people in financial firms in other countries [aka treat nations as colonies] then austerity is a failed policy.