A very interesting video by an Irish economist explaining how the current reduce government spending ("austerity") approach to the Eurozone debt and currency crisis is doomed to fail. It is doomed because cutting government spending in a recession only makes the recession worse, which in turn, reduces tax collections which then makes the government deficits … Continue reading David McWilliams Explains Why Austerity Is Doomed In Europe
Last week I discussed how I think the President's jobs proposal, the American Jobs Act, will be less than stimulating. I updated it here. I based my analysis on what economists call "back of the envelope" calculations - quick simple estimates of the key variables using rounded numbers. Now the folks at Goldman Sachs research … Continue reading Stimulus Requires More Than Taking Your Foot Off the Brakes
One of the my major frustrations as a blogger and as a follower of economic news is the way in which misinformation and falsehoods get repeatedly passed around as they were facts. For example, one common meme that we hear a lot is that the government, especially under Obama, has engaged in a massive spending … Continue reading The Federal Government HAS Been Cutting Spending – And That’s A Major Problem
It looks like we are going to repeat the past. In this case, it's 1937. In 1937 the general discussion in U.S. politics had turned to concerns about debt and deficits. The conservative view that opposed both the New Deal and efforts to alleviate the Great Depression began to get the upper hand. Keep in … Continue reading Learning From the Past – Or Maybe Not.
A poor economy is never popular with the populace. But when the economy is slow and people are suffering as a result of government policies that impose austerity on them, people get downright upset. They even get violent. It's something we should think about as virtually all major developed nations have embraced policies of cutting … Continue reading Learning From Austerity In the Past. A Warning?
Brad DeLong is as puzzled as I, but is more eloquent in expressing it. In so doing he does my classes a favor in expressing a quick version of the history of addressing macro economic crises. For nearly 200 years economists from John Stuart Mill through Walter Bagehot and John Maynard Keynes and Milton Friedman … Continue reading Why the Austerity Talk?
Poor Ireland. For some unknown reason, the Irish seem doomed to suffer under the misguided rule of others, despite being the source of great music, culture and a brew so good For centuries, the oppressor was the English. In this century Ireland has fallen under the boot of the bankers and The Powers … Continue reading Ireland: “Responsible” Policy Punishes Citizens for Bankers’ Sins
European leaders (read banker-types) insist on austerity (read lower real wages and services for middle and lower classes) in the midst of 10% and rising unemployment. Dangerous mix. The one good sign is that the ECB is actually buying govt bonds, including Greek bonds, despite it's public hard-line position. From Calculated Risk: Europe Update: Strikes … Continue reading Europe Update: Strikes in Spain, UK Austerity, ECB Bond Purchases