As has been previously been pointed out here, Europe has really never tried true austerity. They have played around the edges, but the “Austerity” programs have mostly been a sham, There is a Heritage article that points all of this out at the end of the post.
On another front, a Pew research study was released today that absolutely floored me. Most Americans do not either follow the European debt crisis, or believe that it can have an impact here. The numbers in both cases do not even reach double digits. Obviously, the general population is not thinking very much – if at all. The stock market has been falling, as has the value of the Euro and the price of oil, ever since the Greek crisis emerged as a serious contagion, and the election of a Socialist – Hollande -in France. Now, Spain has joined the fray, with a serious bond rate problem, that surfaced today. The same day that Italy suffered another downgrade.
I can only guess that folks do not realize that the problems in Europe will manifest themselves in terms of rates, and an economic slowdown here, as well.