Importantly, there has also been sufficient growth in aggregate demand over recent times to keep the unemployment rate broadly steady and to accommodate a rise in the participation rate (Graph 2).
Debt-to-GDP in G-7 countries is now the highest since the Second World War. The Age of Austerity is not a slogan but a timetable. The task is enormous (Chart 7). Stabilizing debt will require increases in the primary balances of between 8 and 11 per cent of GDP for the United States, the United Kingdom and Spain.