What is going on with Europe's GDP in general?
Comparing the IMF figures from 2008 to 2017 it seems France, Germany, and the United Kingdom have all had economic contraction while the U.S. grew 33%.
The US debt to GDP ratio has increased, but several European countries have experienced the same. Turns out a monetary policy which is tuned to be tight but tolerable for the German economy is a disaster in other parts of the continent. If you are going to increase your debt to GDP ratio, you might as well accomplish something and reduce human suffering. That is, increasing the denominator with stimulus, instead of decreasing it with austerity.
I don't think US policy is perfect - we could have used even more monetary stimulus, and the fiscal stimulus could have been delivered in a more organized and consistent fashion. The incoming corporate tax cuts when the economy is already hot make no sense. We are in a good position to reduce the debt load if policy makers just hold steady.
[1] https://en.m.wikipedia.org/wiki/Budget_of_the_United_Kingdom
https://www.opendemocracy.net/shinealight/kiri-kankhwende/uk...
https://www.theguardian.com/business/2013/jul/29/serco-bigge...
It was purchased mostly by a group of secret investors which promptly turned around and made bank on the 1bn pound price difference.
You are somehow assuming there was a choice to begin with.
There wasn't. If you don't have the cash, you don't get to spend it.
Do note that all EU nations that were subjected to a bailout agreement were forced to do so because they lost access to international money markets and were essentially cut off from receiving any loan. We're talking about half a dozen states that were borrowing themselves at levels close or beyond 100% GDP, and the international money markets raising available interest rates beyond 7% for 5y loans in response.
How do you get a loan when you're over 100% in debtand you're running a keynesian double-digit deficit?
You don't. You pick up your phone to call the IMF for help, and start to cut spending to avoid bankruptcy.
That's true for people, but it's not true for governments, especially the U.S. government. During the economic crises, the Fed created money out of thin air and gave it to large banks with the idea that they could lend it out and assist businesses. This was called quantative easing, which is the modern form of "printing money", but it's very much the same idea.
The risk of that is that doing so devalues the currency everyone else is holding and risks increasing inflation. However, that didn't happen during the economic crises.
Actually, it's specially true for governments, and some people insist on being completely oblivious to that fact. Contrary to what you might believe, money markets do cut off access to credit to a nation that's over indebted and showing off unbalanced books. If that wasn't the case then no eurozone member would have required emergency loans from the IMF and even the EU and EACH just to cover their immediate expenses.
In addition governmentment who control the nation's currency may resort to ramping up inflation to print out extra cash but that doesn't mean they are getting free cashier or aren't empoverishing the whole nation. These magic money-making policies inflict the exact same damage than austerity has with the exception that it restricts access to imports.
The US is a very particular case as money markets somehow treat US debt as a very special case, one whose massive overspending has no impact on lender's perception.
I'm not sure if it's particularly special, just particularly large. It's the largest economy in the world, and even in times of relatively high debt-to-GDP, it's still far better off than many of the Euro-zone countries that were brought to the brink. China, for example, has a far higher debt-to-GDP than the US.
That said, one particular reason why the US may more resilient to inflation is the fact that the dollar is the worldwide reserve currency of choice. This helps with inflation, but can hurt by artificially increasing the value of the dollar hurting exports. So overall, it might not be a great policy, but in a debt crunch, it gives the government more leeway to print money without risking inflation.
Of course bond investors knew the EU did not intend to pursue monetary policy that would allow distressed economies to adjust. US debt is not a magic special case. Take a look at Japan.