Following Europe

Basically, faced with a huge blow to private demand from a burst housing bubble and deleveraging, Europe has responded not as 75 years of economics said it should, with temporary stimulus, but with Herbert Hoover — or, better, Chancellor Brüning — policies of retrenchment. And policy makers pronounce themselves shocked both to find that the bottom is dropping out of Europe’s economy and that their perceived authority and wisdom is being rejected by voters.

Meanwhile, Mark Mazower, an actual European historian, says better and with more authority than I could what I’ve been trying to get at: the Chancellor Brüning reference is not a joke:

Those preaching austerity probably do not see themselves as contributing to a crisis of democracy, but they are. The Italian elections should remind eurozone leaders to pay attention to their voters. Economic fixes have failed to staunch a political crisis that has the capacity to harm not only EU integration, but the legitimacy of the continent’s democratic order itself.

The White House made public an order at about 8:30 p.m. ET signed by President Obama making the budget cuts known as sequestration official and giving the federal government the authority to begin implementing $85 billion in across-the-board decreases.

The order released by the White House demands that "budgetary resources in each non-exempt budget account be reduced by the amount calculated by the Office of Management and Budget."

The cuts would run through Sept. 30, the end of the federal fiscal year.

According to a letter dated today from Jeffrey Zients, deputy director for management of the Office of Management and Budget, to House Speaker John Boehner, R-Ohio, the sequestration calls for a 7.8% cut in non-exempt defense discretionary funds and 5% cut in non-exempt non-defense discretionary funding. It also calls for 2% cuts to Medicare, 5.1% to other non-exempt non-defense mandatory programs and 7.9% to non-exempt defense mandatory programs.

The federal government has said the cuts will soon translate into furlough notices to government workers, and that there will be cuts to government spending on defense contracts and domestic government programs. The plan protects active military personnel and anti-poverty programs.

The letter to Boehner, which introduced a detailed OMB report on the cuts, noted that federal lawmakers voted for sequestration "as a mechanism to compel the Congress to act on deficit reduction." The letter continued, "As a result of Congress's failure to act, the law requires the President to issue a sequestration order today canceling $85 billion in budgetary resources across the Federal Government for FY 2013."