The Dangers of Austerity in Europe and the U.S.

Mark Weisbrot, Co-Director Center for Economic and Policy Research

Austerity&

GDP Growth

Austerity&

Jobs

Myth: The US is just a bystander in Europe’s austerity

Truth: We have power at the IMF.

• Unlike Greece, the U.S. “debt crisis” is manufactured• Short term deficit is due to recession – revenues fall and

spending increases – and weak recovery• Long term deficit is due to health care spending (driven by

private sector health care costs

• Real crisis is 25 million unemployed, involuntarily working part-time, or dropped out of labor force

• U.S. needs further stimulus, job sharing, and other measures to get unemployment back to normal levels; health care reform to eliminate long term deficit