The latest – EU Employment and Social Situation: Quarterly Review was released yesterday (March 26, 2013). The Press Release – summarises the main results. I will look into the full document in more detail another day. Today (March 27, 2013), the Australian Productivity Commission released a major study – Trends in the Distribution of Income in Australia – which provides a fairly detailed analysis of the “composition of the income distribution”. The connection is that fiscal austerity not only causes unnecessary damage now to the prosperity of the nations afflicted with these incompetent leaders, but it also undermines the future growth path of the nation. One of the many ways in which growth potential is being undermined is through the impact of unemployment and falling participation rates has on income inequality. The latter impact also negates key propositions that mainstream economists teach their students every day that there is a negative trade-off between efficiency and equity. So policies that promote more equitable income distributions are alleged to undermine economic growth. The evidence is exactly the opposite.