Five days ago headlines blared across the Internet declaring Germany economy grows strong.
Some of the prime quotes:
Germany remains a standout performer despite Europe's troubles with too much debt in several countries. Unemployment is low and exports of manufactured goods such as automobiles and machinery remain robust.
The country is benefiting from changes to labor laws that it made in 2004 to lower business costs -- changes Chancellor Angela Merkel is now urging debt stricken countries to make themselves as the best way to find long-term growth.
A growing economy is considered the most reliable way to shrink debt burdens like the ones plaguing Greece, Ireland and Portugal, all of which have needed bailout loans to be able to keep paying their debts.
Compared to the same quarter a year ago, Germany grew 1.7 percent.
In 2010, Germany announced a package of Austerity measures, including spending cuts to reduce debt and have succeeded beautifully as the recent news from 2012 proves.
Now we see the New York Times original headline of "Group of 8 Leaders Confront German Focus on Austerity," but when you click the link the headline reads "World Leaders Urge Growth, Not Austerity."
First paragraph:
Leaders of the world’s richest countries banded together on Saturday to press Germany to back more pro-growth policies to halt the deepening debt crisis in Europe, as President Obama for the first time gained widespread support for his argument that Europe, and the United States by extension, cannot afford Chancellor Angela Merkel’s one-size-fits-all approach emphasizing austerity.
Emphasis mine.
Austerity refers to a policy of deficit-cutting by lowering spending.
A couple points here.
• Germany's deficit cutting and lower spending austerity measures have proven to be "pro-growth", showing that when done right, austerity works. The premise of austerity vs pro-growth is false when correct austerity measures are the reason why Germany's economy is growing.
• Sweden implements true austerity measures as well and their average growth rate per year of real GDP for 2010 and 2011 was 4.9 percent.
• France's so-called austerity measures failed and socialists point to that as an example of austerity not working, yet from 2010 to 2011 the French spent more and borrowed more, according to Eurostat.
Other examples from Bill Wilson, President of Americans for Limited Government, via ZeroHedge:
In Italy and Spain, which have been dependent on tens of billions of cash infusions from the European Central Bank (ECB) to refinance their debts, cuts are hardly anywhere to be found either. In Spain, spending was cut by just €11 billion in 2011, a mere 2.3 percent reduction. In Italy, spending actually increased by €4.3 billion.
Both countries borrowed an additional €117 billion last year alone, raising their combined debts to €1.939 trillion. So, no austerity there. Just debt slaves.
Hollande might have been referring to the budgets of debt-strapped Ireland, Greece, and Portugal that have depended on over €290 billion of refinance loans from the European Financial Stability Facility (EFSF) and the International Monetary Fund (IMF).
But even there, the cuts are rather miniscule. In Greece, spending was cut by just €6.3 billion from 2010 levels. In Portugal, just €4.8 billion. Ireland only trimmed €2.2 billion off its 2009 levels, discounting its massive bank recapitalization in 2010 that blew up its budget by €25.7 billion.
The real point is that none of them even came close to balancing their budgets, with over €47 billion of combined deficits for 2011. More debt slaves.
By definition of Austerity, only Germany truly implemented true austerity and they are growing.
The Socialist portion of the "Group of 8" refuse to learn from Germany's success and would rather continue down the road of spending more, increasing debt and destroying the world's economy rather than admit their policies are the reason countries are failing while Germany is thriving.
Yet they call their policies "pro-growth ignoring Germany's true growth.
To top it off, they are trying to pressure Germany into following their failed example.
PS- "Contradictions do not exist. Whenever you think that you are facing a contradiction, check your premises. You will find that one of them is wrong."--- Ayn Rand
The premise here is the socialist mindset that austerity and pro-growth are two different things. Sweden and Germany show the contradiction between that mindset and the reality of the two countries implementing true austerity are both growing. This shows that socialists need to check their original premise because it is wrong.
(Headline changed to reflect Germany's growth data)