When I say “worse than expected.” I of course mean “worse than the right-wing expected. Those of us on the left knew exactly the disaster that these governments were walking into with their near-pathological embrace of “austerity.”
Austerity is sinking the UK and Europe, and the results in Portugal are especially ugly. This may be why people like Paul Ryan are trying to avoid calling their austerity “austerity.” Paul Ryan is used to telling tall tales, but we shouldn’t be terribly surprised with this latest one. Even he can see that the bloom is off the austerity rose.
Make no mistake, European austerity is what the Republican extremists want to inflict on the US. They can spin it however they like, but the GOP proposals are the same economy-destroying austerity that we’ve seen all across Europe.
All signs point towards a triple-dip recession in the UK.
And Portugal is now plunging into the depths of recession, reporting numbers that are much worse than expected.
As our own Gaius Publius wrote recently, no austerity anywhere in the world has restored a national economy.
Even the right-wing American Enterprise Institute is recognizing the problems of austerity, but the right-wing political class is slow to learn (I guess they haven’t added Austerity 101 yet to all of those Christian fundamentalist schools the GOP always fawns over).
What kind of a fool wants this for the US? The GOP kind of a fool, of course. How many times must we see the same failures repeated before the Republicans finally get it?
Portugal expects its economy to shrink 2% in 2013—a much uglier outlook than the 1% contraction that it had previously estimated for the year. One of the earliest countries to be bailed out after the financial crisis, Portugal is now mired in the deepest economic slump since 1975. Today’s news signals that 2013 is a likely addition to two years of steady recession the country has suffered already.
Why the grim revision? Álvaro Santos Pereira, the economic minister, blamed the crummy economies of its neighbors. “Because Europe is in crisis and many European countries are suffering a recession, and over 70% of Portuguese exports go to Europe, it’s natural that there was a significant impact,” he said last week, according to financial daily Diário Económico.
Regardless of the cause, today’s update tarnishes Portugal’s image as a poster child for austerity’s success in helping it make its economy competitive. The country accepted deep budget cuts as a condition of a bail-out by the European Union and the International Monetary Fund in 2011. Just last month, the IMF said Portugal has made “considerable progress” (paywall) toward a return to international debt markets and that “the authorities’ policy reform and efforts have been impressive.”