Tuesday, May 25, 2010
Planning for an economic "lost decade"Paul Krugman asks if we have a Lost Decade Looming? New York Times 05/20/2010:
For the past few months, much commentary on the economy — some of it posing as reporting — has had one central theme: policy makers are doing too much. ...For more on the Japanese bacground see Justin McCurry, Japan's lost decade The Guardian 09/30/2008 and Peter Coy, What the U.S. Can Learn from Japan's Lost Decade Business Week 01/07/2009.
The Obama administration and the Congressional Democrats have been encouraging the deficit worries the Republicans are cynically promoting and seem to be at best oriented toward limiting US government spending growth.
Meanwhile, the European Union countries are responding to the attacks on the euro from banks and hedge funds by embracing budget cuts, severely in Greece and less severely in Spain, Germany and elsewhere. Meanwhile, the new Conservative-Liberal British government is also pushing for significant cuts in public outlays.
This really is a present-day brand of Herbert Hoover economics on both sides of the Atlantic. It's the opposite of what needs to be done to revitalize the economies and address the serious unemployment issues. We aren't exactly back in 1929, because there are a lot of stabilizing elements that have been built in to governmental programs since then.
But this development really creates pessimistic prospects for a strong economic revival. This is really not a good development.
Tags: paul krugman, democratic party
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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