Austerity Lives on in Our Minds and Hearts…
…but in the numbers? Paul Krugman is thrilled that the voters of France and Greece are fighting back against "austerity." While he has plenty of words to work with, he says not a one about actual government spending figures.
Here's an OECD chart, most recent figures available as near as I can tell (if the austerity-ites have more recent ones, it would be good to use them in these discussions) which expresses European (and other) government spending in U.S. dollars (for us U.S.-bound fools), in current prices and purchasing power parity.
Just looking from 2009 to 2010–2010 being the most recent year whose figure are available for most countries–here are the EU countries that spent less in the latter year than the former: Czech Republic (by $1.4 billion), Estonia (by one hundred million), Greece (by $9.4 billion), Hungary (by $.9 billion), Iceland (by $200 million), Ireland (by $1 billion), Italy (by $8.1 billion), Portugal (by $200 million), Spain (by $5.3 billion).
Every one of those countries, though, is spending more than they spent in 2007 (and most of them more than in 2008), and quite a lot more more than in 2004.
For 2004-2010 comparison: Czech Republic is spending $12.7 billion more; Estonia $2.2 billion more; Greece $10.2 billion more; Hungary $8.2 billion more; Iceland $400 million more; Ireland $10.5 billion more; Italy $91.8 billion more; Portugal $16 billion more; Spain a whopping $113 billion more.
So in every case even any apparent "austerity" in the past couple of years is just a slight ramping down from big ramp-ups from 2004-08, approximately. A causal explanation for how and why those dips in government spending in certain countries from 2009-10 are responsible for economic crisis when far lower levels of government spending 7 years ago did not should mention this, and have more to say than "austerity bad for the economy." (The E.U.'s population growth rate has been mostly falling since 2004, though they certainly have more people total than they did then. Google magic has failed me in finding per capita government spending figure time series in the E.U. over the past decade or so, if any commenter has better luck let me know. "Expenditure on Social Protection as a Percentage of GDP" has gone up in nearly every European country from 2004 to 2009, though, according to the chart on page 6 here.)
And in the cases of Germany and France, who Krugman slams as "the Franco-German axis that has enforced the austerity regime of the past two years," Germany's 2011 spending is $26.5 billion higher than 2010 (it is one of the few country's whose 2011 figures are in the OECD chart linked above), and $268.1 billion higher than 2004. For France, its spending rose by $12.1 billion from 2009 to 2010, and by $131.3 billion from 2004 to 2010.
European government expenditures up to 1997-2010 as percentage of GDP.
Russ Roberts at Cafe Hayek also wonders where the numbers are on the austerity story:
I have seen many articles on austerity. I can't remember seeing any that suggest that government spending in any European country has actually fallen. Yes, there is talk of spending cuts or cuts in growth rates. But I'd like to see the data that shows the cuts have actually been implemented.
Don Boudreaux also at Cafe Hayek with a 2009 chart of European government expeditures as percentage of GDP–all of them 10-20 percent more than the comparable U.S. figure.
Markets less thrilled than Krugman at the election results.
As Tim Cavanaugh had pointed out before, the guilty flee austerity when no government spendeth less. It is possible that 2012 data will show this austerity, but Krugman and others like him should feel some obligation to throw in a number or two in these austerity discussions.
Johan Norberg from Reason's May issue on how Europe dug itself into its hole.