Upload

Loading icon Loading...

This video is unavailable.

Is Austerity to Blame for Europe's Economic Woes?

Sign in to YouTube

Sign in with your Google Account (YouTube, Google+, Gmail, Orkut, Picasa, or Chrome) to like ReasonTV's video.

Sign in to YouTube

Sign in with your Google Account (YouTube, Google+, Gmail, Orkut, Picasa, or Chrome) to dislike ReasonTV's video.

Sign in to YouTube

Sign in with your Google Account (YouTube, Google+, Gmail, Orkut, Picasa, or Chrome) to add ReasonTV's video to your playlist.

Published on May 11, 2012

From Nobel laureate Paul Krugman to the free-market-friendly Economist magazine to former Treasury Secretary Lawrence Summers, all sorts of experts are charging that financial austerity measures are killing the great economies of Europe. "Austerity Is So Wrong!" reads the headline of a Krugman piece at The Daily Beast that argues against cutting government spending during weak economic times.

But the critics of austerity have got it all wrong, says Mercatus Center economist and Reason columnist Veronique de Rugy. For starters, many European countries haven't cut spending at all and, among the ones that have, most have made relatively minor trims while also hiking taxes. That's known as "the balanced approach," notes de Rugy, and it almost never works to reduce debt-to-GDP ratios or get economies moving again. Yet critics of cutting government spending in a weak economy ignore academic research showing that significant spending cuts, structural reforms to entitlements, and loosening labor regulations are proven ways to reduce debt loads and get countries moving again.

De Rugy talked with Reason's Nick Gillespie about austerity and its discontents - and what the United States could learn from Germany's economic reforms made earlier this century.

About 7 minutes long. Produced by Jim Epstein; camera by Epstein and Meredith Bragg.

Go to http://Reason.tv for downloadable versions and subscribe to Reason's YouTube channel to receive automatic notification when new material goes live.

Loading icon Loading...

Loading icon Loading...

Loading icon Loading...

The interactive transcript could not be loaded.

Loading icon Loading...

Loading icon Loading...

Ratings have been disabled for this video.
Rating is available when the video has been rented.
This feature is not available right now. Please try again later.

Loading icon Loading...

Advertisement
Loading...
Working...
to add this to Watch Later

Add to