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View Diary: Europe back in recession/deflation (9 comments)

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  •  Somewhat tangential. (7+ / 0-)

    The US, which has been concentrating wealth much more than Europe, has so far avoided a recession relapse because we didn't buy in as much to the austerity hawks.

    While the stimulus should have been larger, and IMO directed towards the bottom end rather than the top, the extra spending helped.

    Here's a recent Krugman blog that goes over some of the basics:

    •  But the austerity hawks are the very top, right? (1+ / 0-)
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      So it's not really a separate issue.

      The rich have more than it's even possible to spend, while services to the poor and middle are destroyed in the name of austerity.

      "He who fights monsters should see to it that he himself does not become a monster. And if you gaze for long into an abyss, the abyss gazes also into you."

      by Hayate Yagami on Thu Aug 14, 2014 at 04:02:32 PM PDT

      [ Parent ]

      •  Yes and no. (1+ / 0-)
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        Hayate Yagami

        Certainly there are those at the top who believe that austerity can further increase their wealth, but generally austerity has been pretty detrimental across the board. Sure, the lower and middle class feel it much, much worse, but a deflating demand-starved economy doesn't help the top much either. They can increase their wealth much faster in a robust and growing economy.

        Honestly, I think it's ideologically driven for the most part (deficits are bad! reduced deficit spending == healthier economy!), and you even see those thoughts occasionally here at DKos. There seems to be a cadre of people in the positions of power making the wrong monetary decisions for the EU, probably because they are following the wrong playbook and ignoring the evidence in front of them. Again, I refer to Krugman's series of writings on the topic of the US and EU austerity measures, I think he's got it pegged pretty well.

        Even in the EU, the amount of wealth disparity varies pretty greatly from country to country, but it seems to have no correlation to either austerity or how badly a country's economy is doing.

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