The real fairy tale is that austerity in the current economic climate won’t result in the economy slowing down more and unemployment going up.
The real fairy tale is that austerity is going to happen at all.
The best way to boost the economy is to cut taxes, regulations and the size and cost of government. Government is the biggest hindrance to economic growth ever.
It would certainly be better if our leaders in Washington would decrease the rate of increase in Federal spending according to some well thought out plan, rather than grandstanding for political capital regardless of the damage thereby caused to the labor market. But employment has decreased steadily since Obama has been President in any event, which means the number of unemployed has been steadily going up, despite the dubious machinations of ‘unemployment’ reporting methods (see link below). And continued runaway spending with no restraint is certainly not going to lead to increased GDP. So somewhere, some how, the excessive burden of government spending must be lifted from the productive sector if ever we hope to see an increase in productivity and thereby employment.
http://data.bls.gov/timeseries/LNS11300000