Politics of Austerity vs. Politics of Stimulous

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Richard Koo, Chief Economist of the Nomura Research Institute gives a brilliant short analysis.

Only government stimulous.can slow the deflationary spiral....similar to one that saw the GDP halved during the Great Depression. Austerity programs will only intensify an already accelerating decline.. The ideological solution is the wrong one.

PDF file.

http://www.house.gov/apps/list/hearing/financialsvcs_dem/richardc.koo.pdf

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 3:01 pm

Comments

This also supports your point, and I agree with it. Thom has a segment on how to save the middle class, I really think it is gone and all that can be done is remove a few of the weights sinking it to the bottom, so it disappears completely a little slower. Feudal life can be considered good for people, the same way some conservatives say slavery was good.

douglaslee's picture
douglaslee
Joined:
Jul. 31, 2007 3:01 pm

Of course the "austerity approach" is a recipe for serfdom. Bringing back a Middle Class is about retuning the economy to support one. Duh. Those who argue that America's Middle Class prosperity of the 60's was an accident of history do not look at the evidence. Those who believe that a giant petro-military empire is a recipe for prosperity and success need to read more history and observe how those who are not paying for empire are doing.

We still drive over WPA bridges on the Pacific Coast. We drive by rusting war memorials. Had the war money been spent on domestic infrastructure, how wealthy would we be and what an economy we could have.

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DRC
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Jul. 31, 2007 3:01 pm

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