Yesterday, Sir Mathew Yglesias proclaimed that "2014 is the year American austerity came to an end"
Which kind of cracked me up. I guess the syllogism is (1) we had austerity, (2) austerity hurts growth, (3) growth picked up in 2014. (4) Therefore Austerity is over.
Here's the data series from 2000 through q3 of 2014 (and it's the same data Matt is using):
From this graph I concluded one of two things must be true depending on one's definition of austerity.
Either austerity means nominal cuts and we never had any of it, or austerity means cuts relative to trend and we are still savagely in its grasp.
Relative to the 2000-2009 decade trend, total government spending is roughly 35% lower in q3 of 2014 than it should be. Hard to say austerity is over by that metric.
When I tweeted this at Sir Mathew, he responded that it "seemed like semantics". One of us, and it could easily be me, does not know what that word means.