US adjusted misery index
The above chart shows the history of this misery index for the US (black: unemployment + adjsuted inflation, blue: +budget deficit). As can be seen, including the budget deficit, this misery index is back to the level prevailing during the stagflationary 70s. While at that time, unemployment and inflation were the problem whereas budget deficits were fairly low, this time unemployment and the deficit are high, whereas inflation has so far remained low.
Only Germany is on the bright side
A country can lower unemployment if it reverts to more fiscal spending but at the expense of a higher budget deficit. Alternatively, a looser monetary policy could also be used to lower unemployment with the risk of fuelling inflation further down the road. As a result, there is a trade-off between these three variables which limits cyclical macro-economic policy. I am convinced that a lot of the economic problems (=surge in the misery index) are of a structural nature for the over-indebted/over-spending/over-leveraged US/UK and peripheral Eurozone countries. What is needed to significantly and sustainably lower the misery index again is time, structural reforms and improved corporate competitiveness.