I liked this by John Aziz on Pieria today:
The only deficit strain, at this point, exists in the speeches of austerity-mongering politicians and commentators. Borrowing is cheap, inflation is low and there is still some slack in the economy in terms of people out of work and spare capacity even after a slow, painful six-year climb out of the trough. That suggests the real disease Britain has suffered from was not too much borrowing but a huge economic slump and mass unemployment. These economic indicators suggest that the British government could comfortably borrow a lot more to stimulate the economy and put people back to work. Investors are offering the money for them to do it! Borrow and spend until the yield on the 10-year hits 4 percent, or unemployment falls below 5 percent, whichever comes first. Build solar and wind and nuclear capacity, fix the roads, build out fibre optic broadband, build new bridges and railways.
It is very, very hard to argue with that logic. Unless you are an austerity-mongering politicians or commentator.
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/don’t want, or need, nuclear though. 🙂
It is v hard to sensibly argue against this. In most respects the USA is way right of Europe, but they went for massive Govt spending & their economy has rebounded. Obama & his people have begged Europe to follow the example. If you look at the USA their recession was MUCH worse than the European one in 2008. Every indicator, since about 2010, has been v positive. Its almost the perfect example of Keynesian economics working.
I don’t know why Balls & Milliband don’t talk about this.
“It is v hard to sensibly argue against this. In most respects the USA is way right of Europe, but they went for massive Govt spending & their economy has rebounded.”
Sorry – don’t agree. US productivity fell off a cliff in the first quarter of this year and the second was only mediocre, too.
The US suffers from the same process as here, that is, banks are only really investing in speculation; the result being that the real economy is starved of investment.
I can understand why the policy is difficult for the euro-zone. Whilst it might make economic sense for Germany, Holland, Austria etc to increase Govt spending, it doesn’t make much sense for Greece, Portugal or Ireland to do so. At least until they’ve established some slight idea of where all their previous Govt spending actually went.
For the £ zone, however, there is just no reason not to follow the USA’s example.
Fine overall, but the employment theory part doesn’t work so long as you have the unlimited reserve army of labour situation, which EU free movement and the Mode 4 provision for moving cheap workers across borders in ‘trade’ agreements, ensure.
This is a major element of transnational capital fixing neoliberalism permanently in place, so we can never have another system.
Those who like to call themselves ‘the Left’ need to wake up to this, otherwise they are just sillybillies talking silliness, actually defending the interests of transnational capital.
There was loads of stuff on TTIP at Labour Party conference but nobody understands the Mode 4 aspect except you, Linda, it seems. I raised it at a fringe with Larry Elliott and the panel couldn’t answer.