Have there been spending cuts in Europe?

Short answer: Yes.

Via Tyler Cowen and the National Review comes this chart (click for big):

What it purports to show is that talk of "savage austerity" is overblown, that in fact no country has cut spending by more than a few billion, and that compared to 2002 levels (why 2002 is unclear) every country is spending considerably more.

Veronique de Rugy, who made the chart, does make passing reference to its major flaw, saying:

If this data were adjusted for inflation (which I would prefer but the data isn’t available) it would possibly show a decrease and certainly a flatter line for all countries.

Presenting such a chart using non-adjusted numbers is borderline dishonest. Flatlining spending in the UK, for instance, is a 3.5 per cent cut in real terms if there is 3.5 per cent inflation.

Tyler Cowen argues that using nominal figures is legitimate since nominal figures are what matter in the short run. If we accept that – or if we accept the easier-to-swallow response that an honest chart would show austerity but not "savage" austerity, or "large" spending cuts – then the next place to turn is to the receipts of spending.

What we find is, as Cowen puts it, a large increase in "automatic stabilizers", a Keynesian term which basically means that more people are claiming things like jobseeker's allowance, tax credits, and housing benefit as incomes go down and unemployment goes up.

These various expenditures are lumped together in the category of "mandatory spending". They are all expenses which governments promise to spend as needed, rather than from a fixed budget. If the number of unemployed people goes up, the amount spend on unemployment benefit goes up, and vice versa. Since the number of unemployed people has indeed gone up, we would expect mandatory spending to increase – as it has done.

In order for nominal spending to stay flat, as it has done, this increase in mandatory spending has to be offset by a decrease in "discretionary" spending – buying things that we actually want. As of the 2010 spending review, the Government was predicting a 26 per cent cut in the departmental spending limits by 2015, from 27 per cent of GDP to 20 per cent.

That is where the "large spending cuts" lie. But Cowen argues that:

That is not how people phrase it, rather they are complaining rather vociferously about "spending cuts," many of which are either imaginary or extremely small.

Perhaps Cowen is merely objecting to political rhetoric, in which case he is correct that "savage cuts to the discretionary budget which are partially offset by a growing mandatory budget" is more accurate, although less compelling, than "savage cuts". But if he is arguing that it is wrong to even claim that cuts exist, then he is being blinded by the same argument that has taken in Dan Hannan and Toby Young. As Daniel Elton puts it:

It is in effect saying "Yes, we realise that your Sure Start Centre has had to shut down, but because there’s a whole bunch of people now in the dole, there are no cuts"

Snip, snip: Have there been spending cuts? Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.