In Europe, troubled nations like Greece and Ireland have imposed savage cuts, even as stronger nations have imposed milder austerity programs of their own. In the United States, the modest federal stimulus of 2009 has faded out, while state and local governments have slashed their budgets, so that over all we’ve had a de facto move toward austerity not so different from Europe’s.

Strange to say, however, confidence hasn’t surged. Somehow, businesses and consumers seem much more concerned about the lack of customers and jobs, respectively, than they are reassured by the fiscal righteousness of their governments. And growth seems to be stalling, while unemployment remains disastrously high on both sides of the Atlantic…

In fact, when you combine the growing evidence that fiscal austerity is reducing our future prospects with the very low interest rates on U.S. government debt, it’s hard to avoid a startling conclusion: budget austerity may well be counterproductive even from a purely fiscal point of view, because lower future growth means lower tax receipts.