Topic: Jeff Madrick's Simple(ton) Soultion to Euro Debt

[BigAlSouth]

In his piece, "How Austerity is Killing Europe", Jeff Madrick actually wrote this howler in the NYR Blog:

How could the EU so misread history and treat with contempt the teachings of John Maynard Keynes, who argued that during recessions governments must expand economies through spending and tax cuts, not the opposite?

See, those betters up there in New York City believe that the European crisis can be averted simply by:

The Eurozone and perhaps the entire EU must act like a unified country, ready to recognize that it must take responsibility for the drastic social effects of rapid spending cuts. The U.S. is no shining example of enlightened policies, but the European Central Bank must guarantee the debt of its members just like the Federal Reserve guarantees the debt of the U.S. Treasury. It can then force restructuring of debt in these nations, with some private investors taking losses.

[/b]

Because, Madrick says, austerity has never worked. Britain tried it "two years ago" and it didn't work.

Indeed, austerity economics has not worked in one single case in Europe in the last two years. When David Cameron’s government imposed a first round of harsh spending cuts in 2010, it utterly failed to revive the British economy as promised.

Like dacades of out-of-control- government social spending can be reversed by two years of cutting back.

Morons . . .



http://www.nybooks.com/blogs/nyrblog/2012/jan/06/europe-cutting-hope/


(edited. Damn, I was typing like JF)

[Pandora]

Keynes should have been strangled in his crib, as should have Marx.

Madrick is a fool.

[John Florida]

Keynes should have been strangled in his crib, as should have Marx.

Madrick is a fool.

  Short sweet and accurate!

[AlanS]

Keynes should have been strangled in his crib, as should have Marx.

Madrick is a fool.

  Short sweet and accurate!

Couldn't have said it better myself.

[Weisshaupt]

Keynes should have been strangled in his crib, as should have Marx.

Madrick is a fool.

Hey, Keynes never said the government should borrow money to implement Keynesian spending.  He advocated that the government should keep a surplus generated in prosperous years, and use those savings to get through lean times- as a sort of grease to keep welfare rolls and other programs running, WITHOUT borrowing or raising taxes.  Naive beyond belief perhaps to expect such responsible behavior out of government, but the idea of borrowing and spending is Neo-Keynesian, and Keynes would have told you it wouldn't work.
 Its realy unfair to place him in the same crib as Marx. .

[Pandora]

Keynes should have been strangled in his crib, as should have Marx.

Madrick is a fool.

Hey, Keynes never said the government should borrow money to implement Keynesian spending.  He advocated that the government should keep a surplus generated in prosperous years, and use those savings to get through lean times- as a sort of grease to keep welfare rolls and other programs running, WITHOUT borrowing or raising taxes.  Naive beyond belief perhaps to expect such responsible behavior out of government, but the idea of borrowing and spending is Neo-Keynesian, and Keynes would have told you it wouldn't work.
 Its realy unfair to place him in the same crib as Marx.

I think not.

He had no business advocating a governmental "surplus" during any time; "surplus" money is not the government's money, it's the people's money that they can and will more intelligently allocate and re-distribute, or save to get through the lean times.  Grease for welfare and other programs?  Bah!  Every dollar removed from the private economy by the government for its "programs" is another dollar not creating wealth.

[Libertas]

I understand Weisshaupts point on Keynes and technically he is correct, but having said that the mere fact of allowing governments to stockpile surplus national wealth it took out of the economy to use as it sees fit can be argued to have been the act which allowed the camels nose to enter the tent and made it easier for the decades of incremental government expansion into the national economy that gives us the Neo-Keynesian nightmares we currently are bedeviled with.