Paul Krugman offers a comparison of the U.S. and European economic approaches (and economies) in his column today -- spending (however modest) v. austerity. But of course if the European economy goes into a hole for the next decade, its not as if, despite the ocean in between, the U.S. will be unaffected. As in 2007-2008, when one major power tanks its economy in our world, the planet starts to capsize. Tom The United States and Europe have a lot in common. Both are multicultural and democratic; both are immensely wealthy; both possess currencies with global reach. Both, unfortunately, experienced giant housing and credit bubbles between 2000 and 2007, and suffered painful slumps when the bubbles burst. Since then, however, policy on the two sides of the Atlantic has diverged. In one great economy, officials have shown a stern commitment to fiscal and monetary virtue, making strenuous efforts to balance budgets while remaining vigilant against inflation. In the other, not so much... Nor was this an innocent mistake. The thing that strikes me about Europe’s archons of austerity, its doyens of deflation, is their self-indulgence. They felt comfortable, emotionally and politically, demanding sacrifice (from other people) at a time when the world needed more spending. They were all too eager to ignore the evidence that they were wrong. And Europe will be paying the price for their self-indulgence for years, perhaps decades, to come. nytimes/2015/01/23/opinion/paul-krugman-much-too-responsible.html
Posted on: Fri, 23 Jan 2015 18:00:01 +0000