How Has Austerity Worked In Europe?

Krugman provides a graph that shows a positive relationship between increases in government spending in various European nations and growth in GDP.  Austerity during recession was a bad idea in Europe.  He also counters critics of government spending who argued that it would increase interest rates.  The standard argument is that government borrowing will crowd out borrowing by private industry because the supply of available savings will shrink.  That did not happen.  Critics then claimed that the Fed distorted the market by purchasing securities.  The Fed cut back on purchases and interest rates did not rise.  A similar effect took place in the UK.  Countries that have the own currency have not been affected by inflation during periods of high unemployment.  There is a good time for austerity that is worth mentioning.  Clinton raised taxes and cut government spending, but the economy grew rapidly despite budget surpluses.  Consumer spending, and large increases in business investment during the internet boom,  compensated for fiscal austerity.