The eurozone depression is now officially worse than the Great Depression of the 1930s. What does that mean in concrete terms? One way of looking at it, courtesy of the British economist Simon Wren-Lewis, is in terms of the output gap. That's how much economic activity could be happening, but isn't, due to austerity and hard money. Here's a chart Wren-Lewis made, looking at the situation by country:
Most people have heard that Greece and Spain are in dire straits. But even places like France, the Netherlands, and Austria are suffering a significant output gap. Heck, even Germany is down about 1 percent.
The overall output gap across the eurozone is calculated here as about 3 percent. Let's be conservative and say that 2 percent is closer to the true number. According to the IMF, the adjusted GDP of the Eurozone is $16.8 trillion. Two percent of that, rounding down, is $300 billion.
So the Eurozone isn't actually lighting more than $300 billion on fire – it's worse than that. The output gap represents jobs, goods, and services literally canceled out of existence for no reason. At least if you piled up $300 billion and torched it, you could keep people warm for a few minutes.