Is the the policy for the ‘Long Depression’ in place?
Paul Krugman is direct and to the point this morning:
Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.
In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.
So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.
maybe we need to go back and ask Krasting “what are they thinking?”
i heard David Walker on NPR last night telling us the deficits… not the present one, the future one… was going to end life as we know it. see, we need a stimulus now, but we also need to cut Social Security or by 2030 the whole government budget will be taken up by interest on the debt.
and the reporter interviewing him fed him the straight lines without so much as a blink.
the fact is that Social Security has nothing to do with deficits, now or ever. and even Medicare amounts to a choice between spending more of your much larger income in the future on medical care than on something else…AS A PERCENT of income… because, as you know, people never alter how much they spend as a percent of their income when their circumstances change.
but Walker has modified his lies since he came to Portland. he now admits that defense will whave to be “reprioritized.” but i suspect that is just something he needs to say to get people to buy the cuts in “entitlements” that his boss has been working for for the past 20 years. including years that Clinton was bringing down the deficit and Cheney was saying that deficits don’t matter.
sorry to run on… but the point is that “the deficit” has become the conventional wisdom and common sense has nothing to say… can’t even get equal time on NPR.
I remember the 60’s & 70’s, when the protests were taking place over the War in Viet Nam, the draft, assorted Social items, the “Lessor People” rose up in multitudes to voice their dismay with what the Congress & P.O.T.U.S. were forcing down the throats of the people. The one thing that stood out above all else, the “Lessor People” had a stake in what was taking place, unlike today. The Congress then, I don’t believe was in the advanced stage of Cancer that it is today. (Corruption) The Cancer permeates the whole system, from the top down to I’m not sure where the disease ends.
I’m sure that if we had manditory military service today, just like the I.D.F., that the “Lessor People” would pay more attention to what’s taking place around them and voice it in no uncertain terms, just as the Tea Party people do, regardless of the fact that the M.S.M. control the content of what goes out on the waves.
I’m also sure that R dan will think this old man daff for using an analogy again, so I appoligise in advance. Don’t have the foggiest Idea how to change, but sure don’t believe that we are going to ride this Titanic to the bottom.
rdan,
The reason Greece and Ireland are having these troubles is no really beleives thay will ever pay back the loans or maintain the austerity. My 17 year old just got back from 2-weeks in Germany, and second to the world cup, the Euro and the PIIGS dominated the news cycle. He and his kids hosts (and the rest – a bundle of 17-18 year olds) talked extensively about this topic (and the mood in Germany is that the PIIGS are taking them down becuase the PIIGS can’t get their financial house in order – and they have a point). The fact that this even registered on 17-18 year old brains should give you a clue about how big this is over there.
Austerity is great. But if no one believes your serious, and does anyone really believe Greece is?, then they won’t be giving you the benefits. In a nutshell that’s the problems. A total lack of confidence that the PIIGS will actually make long-term structural changes to get their financial house in order – austerity of no austerity.
Islam will change
I got the attached graph from Powerline. It shows just where the jobs are coming from – The Government sector. We need private sector jobs if we plan to have a recovery. What’s Krigman’s plans to generate or provide incentives to private sector job recovery?
I know AB’s solution seems to be increase taxes…
Linky: http://www.powerlineblog.com/archives/2010/06/026620.php
The long depression began in 1981 (maybe 1974 when the oil sheiks showed the west they and Aramco can pillage and plunder). That was the Volker/Carter recession which never ended. Good US jobs have been steadily lost since Volpe chose price stabilization over employment.
Monetarism masked it as the middle class eroded to debt servitude.
The Clinton boom may have been a brief respite generating good tech jobs, however, it ended in a monetarist bubble and republican control in the congress.
This is merely a deeper dip in the 28 year on going long depression designed to kill the US middle class.
Who cares that the goose that laid the golden egg is eaten piece meal?
Yes, the times they are a changing and not so positively.
A response to the oil embargo would have been ending militarism in the Persian Gulf and US energy independence, funded by investing the peace dividends from ending US presence in the Mediterranean and Persian areas.
Germans being ‘brought down’ is so 1933.
The Hun has blamed the lesser races in Europe since long before Bismarck federated the various principalities.
Sad to see 55 years of forced, occupied pacificism has not made a dent in their paranoia and national hubris.
The waste and fraud that used up the excess cash from SS payroll taxes crowded out good investment.
The same waste and fraud will not end and will “crowd out” SS outlays.
SS was always meant to be in huge surplus to keep the masses poor, amnd never pay it off.
One of the things to keep in mind is that there were major differences between te way the Long Depression and the Great Depression played out.
The Great Depression was centered on the massive –about one-third — collapse in economic activity from 1929 -1933 and a second more moderate recession -but still more severe than the most recent recession –in 1937-38.
The Long Depression, in contrast was a series of mini-cycles of short, small recessions around a stagnant trend. It was much more like the Japanese lost decade than the great recession.
I have long believed that the US was headed for a scenario much more like Japan’s lost decade of the Long Depression rather than a scenario similar to the deep plunge in the Great Depression.
The Federal Reserve, and main-stream economics believes that Japan’s lost decade was due to a series of policy mistakes and are confident that the US can avoid similar mistakes. I hope such confidence is justified, but I really have doubt that our political system and policy makers really have the judgment or knowledge to avoid making similar policy errors.
The developed world, and particularly the US where the relative drop in employment has been steepest, has no business worrying about deficits when unemployment is so high.
If sanity prevailed, there would be enough recognition of the need for short-term job-building stimulus to make a grand deal with the deficit hawks: more stimulus now, in exchange for a schedule of taxes and budget cuts to be phased in gradually after employment recovers. The goal is to bring the deficit/GDP ratio to a sustainable level over the business cycle. If we get austerity now, there is no business cycle, and debt will get worse anyway because there won’t be any revenue to pay for anything in the long term.
It’s really frustrating that not only is this not going to happen, it never even had a real chance of happening, thanks to the deluded orthodoxy of the economists that have the most influence on public policy.
Of course, the real problem isn’t on the spending side, except for military spending. Given our long-term imperial policy of bipartisan military spending, made ever worse by the post-9/11 climate, it is politically impossible to reduce the only program that can really be cut. Anti-tax ideology prevents the changes in policy on the revenue side to fix things. The only other thing left is fixing Medicare costs, which is really a matter of making Medicare universal and raising the payroll tax to pay for it in the long term. That dies both on policy grounds (it’s SOCIALIST) and on anti-tax grounds.
So, in a nutshell, we’re screwed.
Spencer said: “The Federal Reserve, and main-stream economics believes that Japan’s lost decade was due to a series of policy mistakes and are confident that the US can avoid similar mistakes.” What are the policy mistakes that we are to avoid?
cascadian,
You can try to cut the military but its very difficult. The C-17 buy being the current most obvious example (but there are many, many more). Why do we have troops ANYWHERE in Europe these days? Seriously, the EU states should be able to handle themselves without us sitting on their territory. Same with Japan and the rest of the far east. I have heard more than one general say they only reason we are in Korea is to keep the South from going North (you can take that with a grain of salt). BUt we could cut back there by 50% easily.
BUt the question is how much of an isolationist Buchanonite do you wish to become? Right now Europe, as a whole, cannot project power outside of Europe without the US. If Argentina grabbed the Falklands again the Brits would have a very difficult time retaking them, if they could at all. The power vacuum of a US withdraw would have major repercussions world wide. Now you can be like ilsm and others who think everything will by all roses and kumbaya singing. Unfortuanately, there is zero historical precedent for that and someone will fill the vacuum. And that filling will most likely be bloody.
Now we might not care. We didn’t care when millions died, and 10s of millions still live in tyranny, after our pull-out from Vietnam. That’s a policy decision. We may decide to through the Afghani’s under the bus. Who knows.
BUt the idea that down-grading the US to less-than-superpower status and welcoming a true multipolar world will come with no repercussions is fantasy. Last time we had a big multi-polar world we got WW I…Before that Napoleon…
Islam will change
Japan’s policy mistakes were both in raising taxes and/or interest rates soon after an economic recovery/expansion started.
In other words, premature tightening.
Cascadian said: “If sanity prevailed, there would be enough recognition of the need for short-term job-building stimulus to make a grand deal with the deficit hawks: more stimulus now, in exchange for a schedule of taxes and budget cuts to be phased in gradually after employment recovers.”
I agree that it is an acceptable approach, but wish it had been the one used when the current stimulus was crafted. Instead we got a politically motivated document aimed at supporting state/local govts and not private sector job creation.
There are so many things done poorly in the current stimulus package that it has spoiled the relationships on the Hill. It will take another turnover in Congress to get us moving on a new stimulus package to correct the failures in ths current one. This package has extended the pain and suffering for the private sector workers over those in the public sector.
Spencer, looks like the current administration is hard over to raise taxes. So 1/2 the policy formula is about to fail, and you are partially correct on your concern on the judgement side.
From that description of the mistakes Japan did, the Repubs under Bush had the policy correct. Too bad it also included a housing bubble, otherwise his policy of keeping spending rates under the increased rate of revenue and keeping the tax cuts would have gotten us to a balanced budget. Without that pesky war spending he would have balanced the budget before or near the point of the housing bubble burst.
Co Rev — remember Bush started with a surplus. Yes, it was eliminated by the recession.
But it was not a structural deficit like Reagan originally began with and like Bush created.
The most significant argument against the Bush tax cuts were the social security and medicare deficits that would become significant problems in the 2000s. We knew that the problems were on the long term horizon and the prudent policy would be to have a long term structural surplus to deal with these problems, especially since the social security surplus was only temporary and would become a deficit when the baby boomers retired.
The 1985 compromise between Reagan and the democrats was to raise social security taxes to create a surplus that would be used to finance the social security surplus when the baby boomers retired. But in essence Bush abrogated this compromise by passing tax cuts that created structural deficits that would require tax hikes to resolve when or before the social security system came under pressure. In the late 1980s social security taxes rose from just over 30% of federal revenues to about 40% of federal revenue while income tax receipts fell 55% to 45% of federal tax receipts– corporate and excise taxes accounted for the rest. No matter what you believe, I for one do not believe the political system will cut social security payments to the baby boomers. They probably will be the single strongest political pressure group in a few years– if not already — and this cohort moving through the demographic snake has always had a tremendous influence on the overall economic-political environment.
The biggest difference between the US and Japan is that Japan had its two bubbles of tech and housing concurrently while the US had them sequentially.
Spencer, I agree completely re: the power of the boomer gen. I am not one and lead the cohort in age.
As to the structural surplus, that is an impossibility. Any suplus is annual, and there is no way and no place to save or invest it. So saying the surplus should have been continued is foolishly ignorant. A continued structural surplus is like an anchor on the economy. The only way to invest that surplus is to pay down the debt, and that soon hurts the pension programs around the world. They hold the bulk of our debt.
Bush ran on cutting taxes. His original goal was to balance the budget in light of the obvious inability to do anything about a structural surplus. His plan was interrupted when we had the recession and then the 9/11 attack.
I am amazed that someone who is so obviously well trained in one aspect so misunderstands how the Govt actually is run.
buff
there is a good deal of racism in the attitude of germans toward the PIIGS, but there is also some history… i think small, poor countries do tend to default, and the germans might not care to be stuck with the bill.
this is not the same situation that we have in America, where in fact the poor are already paying the bill for “entitlements” and the debt is all due to the decisions of “the rich.”
not that it isn’t possible for some demagogue to convince poor ignorant while people that it’s really black people who are running up the bill. but it isn’t true.
buff
i can’t speak for AB. and as far as I know i am the only person here who actually advocates a tax raise (for all wage levels).
but in any case, i don’t see a tax cut alone creating those private sector jobs. the problem is that the people don’t have money, or are afraid to spend it. tax cuts won’t change their minds. jobs will. government jobs are as good as private sector jobs, at least to start with.
the jobs need not be make work.
buff
it does not take wholesale cuts. a modest, reasonable cut would do. and raising the tax until the debt is paid down to a sustainable level would only take about a 2% raise in the top marginal level. i take the 2% across the board (poor folk too) though i’d prefer the 2% at the poor end was applied directly to Social Security.
CoRev
i agree wtih you, but let me disagree with Cascadian to this extent: what he says sounds too much like David Walker, and it’s another damn lie to create the grounds for cutting Social Securiyt. We need a stimulus now. And we may need higher taxes later. But we don’t need to cut entitlements later.
Dale, nobody said tax cuts were the answer. Nor did anyone say Govt jobs are bad, but what I have said is this administration does not have a policy to gro the private sector. Without private sector growth there can be no job gains that are not net revenue losers.
Whyd is trhis administrations still not pursuing a pro-business growth policy?
CoRev
I can’t answer that. I think this administration is sold out to the bankers. Or at least overimpressed by his banker advisors. And I believe we keep hearing about tax cuts as the answer. To everything.
You can grow the private sector by creating government jobs. Government workers buy things from the private sector. Not only that, but government jobs quite often spin off the best private sector jobs.
The Japanese central fiscal authority have always run deficits and used personal savings and excess yen from individual investors to raise the needed cash. And lend a trillion in greenbacks back to the USA, too.
The Japanese have proven that it makes little sense to have a revolving growing debt to yourself.
The creditor has the same demands and risks whether it be their own government or someone like Lehman.
Eventually, a net creditor has to demand performance of the debtor and that may not be easy or possible.
In Japan’s case it has to raise cash for the private SS its citizens developed and in the slow years that raising cash required both new taxes and interest rate hikes to get more cash to pay out to its own citizen creditors. This was needed to keep living standards as planned.
CoRev
you may be right about “surpluses” in general. but we need to be careful how we say it.
Social Security can run a surplus exactly as it has without hurting the economy. Only trouble appears to be weaning the Congress off of it, and getting them to pay back the money they borrowed.
More to your point, a “surplus” during the Bush administration could have been used to pay down the debt, without hurting the economy… it’s not a net surplus with idle money left sitting in a vault: it would just be giving the bondholders their money back and suggesting they spend/invest it somewhere else. after all “the government doesn’t produce anything” is what your team is always saying. then with amuch lower national debt, paying back Social Security would not be such scary thought.
Buff,
Don’t you remember Air Command and Staff. Ad Hominem argument are bankrupt intellectually and have no place in logical discourse.
The opposite of the bad name isolationist is the militarist.
The military is no solution and the occupations are plunder for the militarists to sack the US economy.
Calling it buchanite or isolationist to oppose militarism is very lacking in form or logical argument for the need for the war machine, and war profits the militarists have built.
Militarism is an expensive anti productive jobs and corporate welfare program that makes so much money for a few to buy congress that it is unpolitically hard to cut the useless war machine.
It has little real need and the usefulness of C-17 to deliver shock and awe to remote places meaning mostly unimportant znd backward is really bad strategy.
But it does keep the militarists at odds with poor folk and SS.
That way the SS recipient is best described as an isolationist and Buchanite. Or Goebbels would call them unpatriotic to want their due which might hinder the militarist pillaging.
Neither of which are bad names.
Except to militarists.
Don’t expose the waste and fraud, you would be called worse than isolationist you might be called unpatriotic to take a more direct card from Goebbels totalitarian deck.
I don’t know how you would change Islam, the Afghans are isolationists, which does not make them any less the warrior, dangerous to occupiers.
You won’t kill enough of them, if you wanted to, that is not being an isolationist to kill copious women and kids.
ilsm will not change
And as Mark Thoma makes clear, allows much greater flexibility when spending is really needed.
The Panic of 1837: The Onset of America’s First DepressionApr 17, 2008 … There are many factors which contributed to the financial panic which took place during the Presidency of Martin Van Buren, all of which led …
americanhistory.suite101.com/article.cfm/the_panic_of_1837 – Cached – Similar
i don’t know what they called it ‘at the time’, but i wish Krugman would not play wordgames. or maybe he doesn’t understand that a depression by any other name…
Norman
I think a draft would make the young people protest. It would not however have much of an effect on policy. We did not stop the Vietnam war. The Vietnamese simply won it. Meanwhile the rich get their deferments if they want them (Cheney had other priorities, Bush had the National Guard), and some of the rich genuinely like to go to war. Meanwhile the old, tsk tsk, but they don’t usually protest.
As well, the people DO have a stake in what is happening today, but they are “too busy” to take the time to understand it. Or they understand all too well that there is nothing they can do about it.
So while I sympathize, and partly agree, with what you said here, I have to say don’t go calling for a draft. It’s just the worst kind of slavery, and they’d be all too happy to give us one if they thought they could get away with it.
coberly — prior to the 1930s the term recession was not used, rather the term depression was used for what we now mean by recession. that is why the author of this quote you are refering to used the term depression.
Your comment is a great example of the dangers of a little knowledge.
Come on, Co Rev, you are now playing word games.
Why is a structural surplus impossible, it is just the opposite of a structural deficit?
If you think a surplus is impossible you must also argue that a structural deficit is also impossible,
Norman,
The US military does not want or need a draft. A draft would reduce the combat effectiveness of the force and is just not needed.
What your trying to do, as Rangel (D) did when he proposed it, was to start some 1968 style type protests. As we can see, the protest would be over being drafted, not whatever social redress you wish to address.
If your against the war. Great. Vote in people who agree with you and they will cut and run. But right now, as been the case since the start, the wars have huge bi-partisan majorities in the House and Senate supporting our efforts. This includes both Bush Jr and Obama. You in a distinct minority. Its been 39 months since the Dems took back power to end the wars. They didn’t end them. Obama has been in office 15 months and has escalated in Afghanistan and not changed the Iraq policy at all.
You may feel your correct, but the majority disagrees. Go advocate for your ideas, and vote for people who back you. Change opinions. Good Luck.
Islam will change
coberly,
Not saying its the same as in Germany as here. The Germans basically think they are going to get stuck with the PIIGS bill. From my reading (and talking with Germans) they would take the hit if they thought there was a chance that the PIIGS would change their ways. What they really worry about is that the PIIGS will be back for more in 3 years. And 3 years after that…
And they have every right to worry about that.
Islam will change
“A draft would reduce the combat effectiveness of the force and is just not needed.”
Provide some basis in fact or cause/effect thought process concerning ‘combat effectivness’ of the “all volunteer” or professional force.
What is ‘combat effectiveness’? Does it go along with self interest for perpetual war for your career?
From what I have seen ‘combat effectiveness’, a wing inspection kind of thing more theory than reality, is limited to immediate tactics and in the case of Vietnam, Iraq and Afghanistan tactics are fine and wonderful, but contribute nothing to objectives short of keeping the same old useless ‘combat effectviness’ funded.
It has been a foundation of US military philosophy that standing armies are more dangerous than efficient or effective.
This week is the 147 anniversary of Gettysburg. Fought largely by national guard specifically raised for the rebellion and draftees (more as the war progressed). There were no contractors at Gettysburg and industrial war in the horse mobile day was as intense in terms of skill maybe more than today.
So, what exactly about ‘combat effectiveness’ means anything except for professionals making a case for pillaging the taxpayer for thier professional growth and development?
Is ‘combat effectivenes’s any more meaningful outside the militarist cabal than the term “capability” used to excuse waste to buy unrelated expensive stuff?
Outside of the beltway and the main stream media there are ‘experts’ on military affairs who are not militarists, nor isolationists.
Seems that to be a talking head on war you must be a militarist and drink of the military industrial complex kool aid.
ilsm will not change,
Hell, if US had a draft Sgt Snorkle might be threatened to ‘sclain why he does what he does.
Are draftees as scary to the military as openly gay soldiers?
“We are losing our nation to lies about the necessity of war,”
Rep. Dennis Kucinich, making a speech to the House of Representatives on Monday, had a few choice words to describe the situation [pallets of US money leaving Kabul].
I think he is optimistic, I would say “lost the nation to the lies selling perpetual war”.
Gut state and local budgets, kill jobs while funding perpetual war for lies and karzai’s Swiss accounts.
Long war delivers long depression.
Ask the Russians.
ilsm will not change
There are all kinds of “entitlements” funded in the discretionary side of the USG budget.
There are more than $800 B in federal civil service retirement ‘assets’ secured like the SSTF, with a new collection system (FERS at 3 instead of 7%) driving down federal employee retirement “reserves” far worse than the SSTF.
There is a growing exposure from current $400 B in a trust fund, for military retirments, which is money in an accounting track.
There is huge need for military retiree health care to pay for.
So, on the entitlements side they are considering cuts for 100 M + people.
While on the discretionary funded benefits side the financials are nearly as huge and the funding even worse, no cuts for the munificience of a few million.
Some day discretionary will have to be savaged, to pay for its own bloated retirements and health systems.
Long war and long depression are twins which feed eachother.
ilsm will not change
Spencer, after writing my comment I thought about it and should have better clarified what I meant. First. There can not be an actual surplus. Annually, the money is all spent. There may be a structural budget surplus. Even there the money is all spent.
And, that is the conumdrum re: surpluses. The more we collect, the more we spend. The more we collect the more is removed from immediate private sector use.
Deficits however, are a totally different animal. They represent delayed revenue collections for today’s expenditures. As Dale pointed out, the real restiction on that deficit process is our ability to pay the annual interest on our prior deficits/borrowing.
So, making my point re: surpluses, there is no place to invest that surplus. It is all spent. The major arguments revolve around how best to spend that annual budget surplus, with a large outcry for it to be spent paying off our prior debts. The republicans prefer to give the excess back to those from which it was collected instead of spending on new or expanding existing programs.
Paying off prior debt has its own type of unanticipated consequeces. I say unanticipated because typically we do not pay off our debt persay. We do let it expire and stop or reduce adding new debt. We also just let inflation take care of it reducing the ratios of debt to GDP. Under Clinton we actually called in some treasuries (a direct debt pay off.) There are other ways of lowering the debt, but they are less often used.
So, as Bruce said in the other thread, in the “Big Boy Real” world those revenue surpluses do not exist. They all get spent in that fiscal year. There are almost no ways to carry over those surpluses. Indeed, to do so is against the law, in nearly every instance. I do know of a couple of small pots of revolving fund money that can be carried over via different and very restrictively used laws.
So a structural surplus is an artifact of the budget process. While a deficit is an articact of the revenue/expenditure process. Surpluses have a very, very short life of months, and the deficit can live for centuries.
If you have a different undestanding I would like to hear it.
buff
i can’t disagree with you, but i have a suspicion
germans naturally think they are better than other people so it is easy to convince them that those lazy incomptent southernors are going to be on the dole forever.
but i think the germans are being encouraged to believe this by the bankers who have another agenda entirely. the “austerity” that is being imposed is the same damn austerity that the banks imposed on south america as the price of continuing to loan them money. it is not based in actual economic experience, but in the rationale that all bankers live by. we need to discipline the workers so they expect less, while we take their money and distribute it to the “productive” people… meaning them as already has it.
it’s no accident that their first target is the retirement system.
spenser
not so sure. i think the japanese people just decided they were working too hard for plastic toys and decided to save their money for a rainy day. a “capitalist” economy cannot thrive that way. but the people of japan seemed to be saying, it’s okay. we have enough.
this is one reason the capitalists hate policies that protect the people from destitution.
i don’t really know much, but i’d bet that a survey of japan would find that their “lost decade” did not result in much actual suffering.
spenser
and your answer seems to be evidence of the danger of not being able to think.
my point was that a depression is a depression whatever you call it.
coberly,
The Germans think they have a better system than the Greeks. I think they are right about that. I disagree with your suspician. From everything I’ve seen they just plain want to be assured that the Greeks (and the rest of the PIIGS) get their collective act together before they hand over the big money. They would not have a problem doing so if the PIIGS do it. BUt the Germans and French also, have every right to expect the Greeks and the rest to get their act together. And the Greeks don’t have a good track record nor the rest for that matter.
I’m not sure what your complaint is about. The Germans have every right to make sure their money is well spent. Otherwise why not just send their own people a check instead?
You keep defending people/countries who act irresponsibly and then think there are no consequences for their actions. As John Wayne is credited with saying,”Life is hard, its harder when your stupid.”
Islam will change
Of course they don’t need the draft. They can count on the shrinking of the resources of the middle class to encourage people to look to the military as a career when the private sector isn’t offering that much.
The same ones that the people screaming loudest about the deficit want us to follow. As was noted in an earlier post, government workers are just like other workers. They buy things from private companies with their salaries. Saying that now is the time to tighten our belts, when inflation is such a non-threat that almost as many are worried about deflation is a bad idea. Now, I can understand those saying that it’s where it’s being spent. I’d like to see more serious infrastructure spending. I’d also like a large program aimed at letting school districts and other state and local government agencies have money to spend on improving their energy efficiency to save them money. Private contractors would be doing the overwhelming bulk of that work. And cutting unemployment benefits or refusing to extend them when the number of long term unemployed is so high is a serious error. That money also goes straight into the overall economy because it’s so much less than what the typical unemployed person was making when they had a job.
buff
read what i said more carefully. i agree that the germans don’t want to have to pay for greece, and i even said there was some history behind their concern.
but i also said that the world wide bankers have got a “narrative” going that says we are all going to die unless ALL pensions are cut. this is a lie.
i don’t know how the germans could have insured their loan, but i strongly believe the final “austerity” package rested more heavily on the poorer worker than on the richer greek.