Getting some Greeks to actually pay taxes would have been far more effective than austerity. If the economy relies on deficit spending to produce growth then yes, you will be in trouble. The issue has been that during the good times many countries around the world were running deficits, which means they can't use counter cyclical measures to get out of a recession. It's one of the unfortunate facts of the last 30 years is that neo-liberalism has been in vogue during massive periods of growth so no one (well, not many) had money put aside for a rainy day. Now they have to borrow money because the rainy day is here. Yes, you can't borrow in perpetuity, but borrowing money in the biggest financial meltdown in 80 years is precisely the time to be borrowing. Would it be worth running up 20% GDP in debt to get through the crisis if it meant you came out of the crisis with a GDP 20% bigger? Damn right it would, you just have to actually go ahead and pay that back then and not let the neo-libs come in and sell the country to pay it off now so you can cut taxes.
The last 30 years of reality has absolutely and undeniably refuted neo-liberal economics. Keynesianism, as Keynes saw it had some problems (as learnt in the stagflation crises of the 70s), but it is quite clear that counter-cyclical government intervention in the economy makes for a more stable economy with greater prosperity for a greater number of people.
Credits & Style Info
Talk Politics. A place to discuss politics without egomaniacal mods
![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
(no subject)
Date: 16/11/12 06:37 (UTC)The last 30 years of reality has absolutely and undeniably refuted neo-liberal economics. Keynesianism, as Keynes saw it had some problems (as learnt in the stagflation crises of the 70s), but it is quite clear that counter-cyclical government intervention in the economy makes for a more stable economy with greater prosperity for a greater number of people.