Same line of thought. From Krugman.
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September 18, 2011, 10:59 am
Stimulus, Austerity, and Double Standards
Just a quick thought: in much discussion of economic policy these days, the presumption is that stimulus had its chance, it failed, and that’s that. Never mind those of us who say that we actually didn’t do nearly enough — and were saying that from the beginning, not as an after-the-fact rationalization. It’s one strike and you’re out.
Meanwhile, the pain caucus keeps telling us that austerity is the way to restore confidence; and confidence keeps not being restored. Ireland, for example, has imposed savage austerity, yet the interest rate on its 10-year bonds is still 6.7 percentage points higher than Germany’s, down from recent peaks but still far above its level when the austerity program began.
Yet somehow nobody in the pain caucus says hey, this was supposed to work but it didn’t, so our theory is all wrong. Instead, they just insist that we double down, continuing the beatings until morale improves.
Just saying.
krugman.blogs.nytimes.com |
