Why is the Current Recession so Bad?

This is Kevin Drum's favorite chart of the year. It shows that one big reason our current recession has been so stubborn is that America's governments have shed 750,000 jobs. This experiment in austerity during tough times is one we have never tried before; even under Reagan, as you can see, the government shed only about 100,000 jobs over the same time frame, and since back then we had high inflation there was some justification for austerity. Now we have austerity for austerity's sake, and we are paying the price.