By all accounts, the austerity measures in Europe failed.
Italy, Spain and Greece all suffered massive economic downturn after the austerity measures...
This is why you never cut spending during a recession, only during economic prosperity.
This is the premise of Keynesian economics, NEVER cut in a recession. Cut government spending during economic prosperity, so that you can balance the budget and pay down the debt. This then gives room to spend more in a recession to stimulate the private sector. W. Bush did the opposite of this, he dramatically increased spending during prosperity which ruined Clinton's surplus and gave us very little room to stimulate this last recession.
From 1941-1973, the U.S. had it's longest and great economic expansion known as the Postwar Economic Expansion. During this period, BOTH political parties implemented Keynesian policies. The GOP then went back to pre-Great Depression fiscal policies (Friedman's variation of the Austrian school of economics) when Reagan took office.
@Mjǫlnir - That's a peculiar take on our situation. Considering Democrats are the only ones wanting to increase government revenue by raising taxes. Republicans have NEVER balanced the budget (paid down debt) beginning with Reagan, when the obsession with tax cuts were adopted. The last Republicans to actually balance the budget (Eisenhower and Nixon), both RAISED TAXES. The last four Presidents to actually balance the budget and pay down the debt? RAISED TAXES. Tax cuts have NEVER increased revenue, the Republicans have been the party of HUGE deficits ever since Reagan.
I found it entertaining that Republicans were suddenly trying to act like deficit hawks when Obama took office, considering the majority of our debt is from Republican Presidents ($9 trillion). This is what happens when you cut taxes and increase military spending, it's fairly simple.
@Little Princess - Then how do you explain the economic success of countries like Germany, Sweden or Denmark? These countries are very well off at the moment, and their fiscal policies are dominated by European democratic socialism.
EDIT: @Little Princess - You realize that all these countries operate with a national debt as well? You realize that the U.S. has had a national debt since the Revolutionary War, and has only been fully paid down once in 1832? Your attempt to apply personal finance principles to a national held debt tells me you know basically nothing about macroeconomics.