There is very definitive proof.........the US developed and implemented a stimulus plan back in 2008 and is well out of recession and experiencing considerable expansion despite the fact that the EU is still mired in recession.
The countries of the EU implemented varying degrees of austerity in 2008 and continue to be mired in recession.
Yeah, you need to quit looking to CJ for economic advice. The two of you together couldn't manage your ways out of paper bags. Let alone difficult economic circumstances. Neither of you understands a damned thing about economics, as your posts here make clear.
Argue with this guy:
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Since 2010, the growth rate in China has fallen by a third and is headed below 7%. Brazil is in recession. Russia, which spent a staggering 10% of GDP on stimulus, is now contracting sharply.
What happened? Emerging nations borrowed from the future to produce that flash of growth in 2010, and now they face the bills. Their government budgets have fallen into the red, from an aggregate surplus of 1.5% of GDP in 2007 to a deficit of nearly 2% of GDP in 2014.
To pay for this deficit spending, public debt has risen significantly, throwing the books out of balance. Excluding oil-rich Saudi Arabia and Russia, the average current-account balance of emerging nations has deteriorated from a slight 2007 surplus to a 2014 deficit of 1.7% of GDP. In countries such as India, more than 10% of bank loans have gone bad—the borrower has not made a payment in months—and the bad loans are concentrated in state banks that were ordered to bail out troubled companies.
These burdens help explain why the IMF and others are lowering forecasts for emerging-world GDP growth for the rest of this decade to 4% or less—a return to the pace of the crisis-ridden 1990s. Only the 1990s were very different. By the end of that decade, most emerging nations had no money to burn, no lenders they could turn to. They were forced to reform, cleaning up bad debts and pushing to make companies more competitive. And tough reform set up these economies to boom in the last decade. After 2008, many of the same countries focused on stimulus—and ignored reform.
. . .
Agustín Carstens, the president of Mexico’s central bank, recently told me that in the long run “fiscal and monetary policy cannot create growth.” And former Indian finance minister P. Chidambaram admitted that his government “lost control of the economy” because of a stimulus campaign that led to higher deficits and inflation.
These are voices of hard experience—and warnings the developed world should consider before following the siren call of more stimulus.
wsj.com |
