While the case against austerity is glaringly obvious in Europe, where nations like Greece, Spain, and Portugal are in a death spiral of high unemployment, high suicide rates, and high debt – there’s now more evidence that austerity is hurting the United States economy, too. A study by the Center for American Progress compared states that have cut spending and enacted austerity with states that have increased spending and pro-growth policies.
What the study found is – in states that have pushed through austerity, the unemployment rate is 4.1 percentage points higher than before the recession, there are 6% fewer private sector jobs, and the state economy is growing 2.7% slower than before the recession. On the other hand, in states that have increased spending – the economy is growing 2.6% faster than before the recession. Basically, states under austerity are watching their economies shrink, states not under austerity are watching their economies grow.
Austerity only works to crash economies, which is why Republicans are in favor of it while President Obama is in the White House.