European Ministers Advocate Austerity as an End In Itself, not to End the Debt Crisis

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Tuesday, 05 March 2013 06:20

The Washington Post began an article on a meeting of the euro zone finance ministers by telling readers:

"European leaders demanded that euro members press on with budget cuts to end the debt crisis."

At this point there is overwhelming evidence that the primary effect of the austerity being demanded by the finance ministers is to slow growth and increase unemployment. As a result of the negative impact on output, the budget cuts lead to little improvement in the financial situation of the affected countries.

Since the evidence shows that the ministers' austerity agenda is not an effective way to deal with the debt crisis it is wrong of the Post to tell readers that this is the motive of the finance ministers. This assertion assumes that the finance ministers have no clue about the actual effect of the policies they advocate. While this may in fact be true, the Post certainly cannot claim to know that the euro zone's finance ministers are completely clueless about economics.

It would have been more accurate to simply report what the ministers claim, for example writing:

"European leaders demanded that euro members press on with budget cuts 'to end the debt crisis.'"

This would made have made it clear to readers that the rationale claimed by the finance ministers bears no obvious relation to reality.