There is a chance that Paul Krugman actually believes the Keynesian non-sense he spouts. I hope not, I hope that he is just carrying the Liberals' water once again because if he does believe this non-sense he could be the first retarded Nobel Prize winner ever. In his column today he is blaming the lack of growth in Greece, Ireland and Spain on - wait for it - the austerity reforms demanded by the Germans and others in the European Union.
Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It's not an official recession yet, but the only real question is how deep the downturn will be.
Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain's slump has now gone on longer than its slump in the 1930s.
Gee I wonder why? Could it be that for decades these countries have spent more than their tax receipts? Lavished unsustainable perks on public sector employees (guaranteed six months vacations, retirement when you are, what, 25 or so)? Or draconian taxes and regulations on businesses where it is virtually impossible to fire someone who is underperforming?
No, according to Krugman the problem is NOT the decades of public sector extravagance practiced by these countries, but rather, the stingy German workers who no longer want to pay for it.
Hang on there's more:
The doctrine [austerity measures] asserted that the direct negative effects of spending cuts on employment would be offset by changes in "confidence," that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates.
See what he's doing there. He is blaming the continued shrinkage on the (savage) austerity measures. How 'bout this one Paul, how about the 'expansion' you refer to was largely an illusion. The reason these countries enjoyed their previous bond ratings were due to artificial expansion from government spending NOT private sector investment. It's like the Avon lady buying from herself. The more she buys from herself the higher her commission right?
What is incredible to me is that once again the answer is government spending. Krugman and his ilk maintain the ludicrous idea that we can spend our way out of a recession. I don't know about you guys but this certainly does not work in my household.
The point is that we could actually do a lot to help our economies simply by reversing the destructive austerity of the last two years. That's true even in America, which has avoided full-fledged austerity at the federal level but has seen big spending and employment cuts at the state and local level…
Well, never mind: all the federal government needs to do to give the economy a big boost is provide aid to lower-level governments, allowing these governments to rehire the hundreds of thousands of schoolteachers they have laid off and restart the building and maintenance projects they have canceled.
I.. just.. really.. that's the (fill in the bad word of your choice here) answer? Public spending, spending and more (bad word again) public spending???? Where the hell is all this money coming from? Oh yeah, the private sector and China. It's Avon lady all over again. What kills me here is that he doesn't even give Scott Walker a shout out here. Oh, that's right, what Walker did in Wisconsin runs counter to Krugman's, ahem, argument.
It took a long time for the socialists bubble to pop in Europe and it will take time for the market to readjust - that is if the elites will get out of the way and let the market reach equilibrium again.