Friday, July 22, 2011

Austerity is not a country south of Germany

It is an economic policy being foisted upon the publics of Europe and the US by a group of otherwise normal people who believe the current recession needs to be both deeper and longer. As Dr Krugman explains.
These are interesting times — and I mean that in the worst way. Right now we’re looking at not one but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of state fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended...

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed.
Rat begins to make more and more sense.


click pic to big

Comments:
The cartoon is a smile, but a head-scratcher. I'm not opposed so much to someone overthrowing the government. What I'm opposed to is whatever would probably replace it.

That government's been overthrown so many times already, starting with Honest Abe Lincoln leading half the country to take over the other half by armed force because they wanted to live some other way than he thought they ought to.

From then until now most of what has changed is the targeting.

Thanks for the chuckle.
 

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