Lessons from France

Not only is austerity not working in Europe, it is creating political upheaval.
The U.S. House recently passed, and a presidential candidate has endorsed, a budget that is more austere than the measures imposed in France.
The results of austerity in France were as many economists predicted. By reducing demand at a time when the economy needed an infusion of cash, a bad economy was made worse.
Economic contraction increased the deficit as tax revenue fell.
France attempted to insulate the wealthy from increased taxes as it tackled the deficit, as does the House budget. France cut social programs at a time when its people were struggling to find work, as does the House budget.
The result was not surprising. Socialist Francois Hollande beat the mastermind of the austerity budget, incumbent Nicolas Sarkozy.
There are economic and political lessons to be learned from the failed experiment in France. Congress should be taking notes.


1 Comment

Filed under Federal deficit, Recession, stimulus

One response to “Lessons from France

  1. Wow, do you think we can LEARN from the French experience? I did not say from the French–just from their experience. America is EXCEPTIONAL–ordinary rules of economics do not apply to us, and that same presidential candidate may have said something like that. I think this op-ed will not carry any weight with most of the North Alabamians who read it. Of course, it is brief, so maybe they’ll get through it before exploding in rage and disgust.

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