WHY AUSTERITY MEASURES ARE DOOMED?

Day after day, senior economists continue inveighing against austerity strategies. But none of these people seem capable of explaining in plain, simple language why imposing austerity is utterly foolhardy and in fact just plain stupid.

Here's what it means in clear, unambiguous language. Under austerity plans, governments must radically reduce their spending. How do they do that? They buy fewer goods and reduce government services. When a government cuts back, the companies and manufacturers lose significant income. So they have to lay off large numbers of workers. That reduces the government's income-tax revenues, raises the nation's unemployment rate and increases unemployment benefit payouts. All of that ricochets through the economy. Other businesses suffer, too, because consumers have less money to spend.

Austerity programmes drive weak economies directly into recession. That's just that simple. And that's exactly what's happening in Europe.

While the European Commission acknowledges that the deepening slump in the European Union is caused mainly by depressed consumption resulting from severe austerity measures, it is nevertheless demanding that EU member states stay the course of reform and avoid any loss of momentum.

While the European Commission recognizes that Europe's unemployment crisis is a desperately serious problem, it is offering prescriptions for more austerity that will make the situation worse.

The deepening of austerity has already produced explosive social tensions throughout the continent, with mass protests involving millions in Greece, Spain, Portugal and Italy and the fall of governments associated with plunging the working class into a waking nightmare of poverty and mass unemployment.

Indeed, the outlook for the whole of Europe is dire due to an appallingly misguided economic strategy. It's a failure, in particular, of the austerity doctrine that has dominated elite policy discussion in Europe. EU leaders must get over their obsession with eliminating deficits. It will lead to very slow growth for a long time. Instead, they must use temporary deficits to restart growth. Rarely has policymaking been this poor. Sooner than later, EU citizens will say, No more!, and political instability will result.