Posted on 04/24/2012 8:02:08 AM PDT by MichaelP
This morning brings news that Europe may finally be beginning to soften on the "austerity" philosophy that has brought it nothing but misery over the past several years.
The "austerity" idea, you'll remember, was that the continent's huge debt and deficit problem had ushered in a "crisis of confidence" and that, once business-people saw that governments were serious about debt reduction, they'd get confident and start spending again.
That hasn't worked.
Story at link
(Excerpt) Read more at finance.yahoo.com ...
HA ha ha, since when WelfarEUrabia had austerity rules?
HA ha ha, since when WelfarEUrabia had austerity rules?
I think this is more akin to resignation. Europe was doing narcotics, now they are picking up the gun to blow their brains out.
Our thinking is close on this one.
LLS
To deflect the obvious, they start ranting about all the water damage being done (”may as well let it burn because what’s left will just be a soggy mass nobody wants anyway!”).
Yes, As I understand it, Keyenes was definitely right. A massive infusion of governtment cash will provide an economy with a healthy jolt - but ONLY if the cash infused is money from the government's current account. IOW, money it already owns.
Borrowed money causes inflation and like a drug addict, a government must borrow again when the first stimulus runs out and pay the borrowing costs on the whole lot of it. Whereas, the infusion of real cash begets a real return in the form of collecting solid tax receipts from a healthy economy.
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