Japan is the 2nd leading economy in the world though
soon it will be 3rd. Since 1990 they have had a stagnant and
deflating economy.
The day after Christmas they got a new government under the
leadership of their Prime Minister Shinzo Abe. Guess what it plans to do for
their economy? He will be applying good old Keynesian economics in a big way to
try and end the long-term recession through government stimulation, regulation, banking reform
etc. Or, fix the debt after you get the economy going don’t further depress it
with austerity measures.
This is a big deal not only for Japan but for the rest of the
world. Given, you can’t make direct correlations between one countries
economics and another’s but this should be very informative. But they will make
an excellent comparison to what they are doing in contrast to the European
countries that are trying austerity measures to stimulate their economics and
they have not worked. Which is what the Republicans are trying to implement here.
I wonder if those who are pushing for debt reduction here and
cutting government programs have observed what is going on in Cypress, Greece,
Ireland and the like? I’m betting that Japan will be doing much much better.
Of course the austerity hasn't worked in Europe. They haven't tried it! That is why.
ReplyDeleteCheck these countries' financial figures and you will see that government waste spending has actually increased, not gone down.
As Will said in his excellent point about how greed makes things worse: "Maybe Mr. Krugman needs to tell the truth here and admit that the major chunk of this so-called European austerity program is tax hikes, and that maybe it's that that's bringing the recovery to a halt. Not that I'll be holding my breath for that to happen, obviously. "
I couldn’t learn much about the source of the chart, as the print was too small for my old eyes. It does seem rather obvious the inflation continues during spending cuts. And this strange site seems a bit out of touch with most others.
Deletehttp://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/02/the-u-s-is-now-planning-more-austerity-than-europe/
http://en.wikipedia.org/wiki/Austerity
http://aneconomicsense.com/2013/02/14/europe-gdp-falls-again-austerity-programs-lead-to-contraction/
http://money.cnn.com/2013/01/27/news/economy/europe-austerity/index.html
http://www.usnews.com/opinion/articles/2012/06/01/the-myth-of-european-austerity