Nick Baumann |
I cover national politics and civil liberties issues for the Washington, DC bureau of Mother Jones. I have also written for The Economist, the Washington Monthly, the Atlantic, and Commonweal. Email me at nbaumann [at] motherjones [dot] com. |
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Notes"The reason austerity doesn’t work to quickly fix the problem is that, when the economy is already struggling, and you cut government spending, you also further damage the economy. And when you further damage the economy, you further reduce tax revenue, which has already been clobbered by the stumbling economy. And when you further reduce tax revenue, you increase the deficit and create the need for more austerity. And that even further clobbers the economy and tax revenue. And so on."I know lots of people hate Henry Blodget, but this is a pretty lucid summary of what Krugman’s been trying to say.
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Notes"The GDP of the United States is $15 trillion. So 5.5% of GDP would be $820 billion. This means that Spain’s two-year target would be the equivalent of the United States cutting its annual budget by $410 billion. No one — literally no one, not even Paul Ryan — has suggested budget cuts anywhere remotely near those levels. Even though the U.S. economy is in much better shape than Spain’s, everyone believes that budget cuts of that magnitude would wreck our fragile recovery."They’re going crazy in Europe. (The Reign in Spain Is Not Keynes, by Kevin Drum.)
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Chart: What you think you know about Spain, Germany, and the Euro crisis is probably wrong.
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Notes"I still don’t understand why, if this is all as obvious as it seems to me, equities aren’t down 20% now, rather than 2% or 3%."Well that’s fucking scary.
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Notes"Watching both the United States and Europe careen recklessly toward fiscal oblivion simultaneously is not something I thought I’d see in my lifetime. Just goes to show my lack of imagination, I guess."
