From Ezra Klein, who puts the austerity hysteria to rest:
The yellow line is America. The red line, the UK, has been stagnant since David Cameron's government game to power in 2010 and appears now to be permanently stuck at 2006 levels. the entire Eurozone too appears to be heading into stagnation if not outright recession. Both economies said austerity was the answer. Both economies are now stuck below their January 2008 peaks where the US and its stimulus package has -- surprise! Gotten us ahead of the curve and now above where we were in 2008.
If we had listerend to the GOP and cut spending massively like they demand we do, we would be in the same recessionary boat as Europe. Period. If they get into power in 2012, they will do to our economy what conservatives in the UK and the Eurozone did to theirs. As it is, please note that our economy did stagnate in late '10/early '11 for a couple months there as the new GOP House took power and we ended stimulus spending programs rather than continue them (which was politically impossible). The President then turned to other methods to boost the economy and you see the curve upwards during the end of last year as things resumed improving despite the GOP trying to sink the economy.