austerity

Paul Krugman and the European Austerity Myth

With both France and Greece deciding to jump out of the left-wing frying pan into the even-more-left-wing fire, European fiscal policy has become quite a controversial topic.

But I find this debate and discussion rather tedious and unrewarding, largely because it pits advocates of Keynesian spending (the so-called “growth” camp) against supporters of higher taxes (the “austerity” camp).

The Biggest Budget in History

The Wall Street Journal notes today that the federal government spent more money in the just-concluded 2011 fiscal year than in any year in history, and no one noticed. What happened to all that austerity and all those spending cuts that we heard about all year?

Daniel in the Looter’s Den: My Adventures at the UN

I was at the United Nations yesterday for something called “The High Level Thematic Debate on the State of the World Economy.”

Most speakers, including the secretary general of the United Nations, the president of the European Commission, Paul Volcker, and Joseph Stiglitz, to varying degrees blamed private markets for the fiscal and financial problems of the world. Not surprisingly, there also was a consensus for more government—usually wrapped up in buzzwords such as “sustainable development” and “equitable growth” and ”coolective action”

Italy Slowly Recognizes that the Substance of ‘Austerity’ Matters

Apologists for big government have regularly warned that Europe’s austerity measures would push the European economy into a recession. To some extent they’ve been correct, but not for the reasons they claim. So far austerity in countries like Greece and Italy have been austerity for the private sector, not the public. They’ve attempted to close budget gaps by tax increases rather than spending cuts. Witness Mario Monti’s implementation of a tax on first home purchases (sure to do wonders for your housing and construction labor markets).

Cutting Military Spending, Rethinking Grand Strategy

The Associated Press’s Pauline Jelinek has a story on the wires/Interwebs today that pokes holes in Leon Panetta’s claim that Pentagon budget cuts on the order of those contemplated under the debt deal’s sequestration provisions would be “devastating to the department.” Jelinek quoted me, as well as the Center for American Progress’s Larry Korb, and the Center for Strategic and Budgetary Assessment’s Todd Harrison.

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