Just a short one on economics…

Well…I had this idea after reading quite a few articles on what is happening in Europe with the bailout in Greece and the continued focus on austerity and cutting spending. All of the statistics that we see from studies there that cite lower growth and the distinct possibility that Europe will fall back into recession (Portugal and Spain are already there) do nothing but to confirm what Keynes said about spending cuts….that in a recessionary environment government should deficit spend to replace consumer spending and keep the economy growing. But, what all of the governments of Europe have done is listen to the fiction about the bond hawks and the crazy notion that cutting spending will make economies grow…what they have done with the massive contraction of government spending and the severe cuts to wages and benefits of the workers is to ensure that their economies will contract…forcing another round of austerity that will further feed this downward spiral. At least here in the US, we have made a half-hearted attempt at a stimulus and have not listened to the nonsense of the repubs that cutting spending will spur growth…this only works when the economy is growing at a sustainable pace and inflation is a threat….and that is not true here with only a .2% increase in prices on January…leaving an acceptable 2.4% inflation projected for the year…geez…

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