Thursday, June 24, 2010

The European Union is not the United States

German Chancellor Angela Merkel's recent agitations for global austerity measures should be kept in perspective by the deficit hawks in the US. For example, it is quite easy to imagine Germany turning its back on Greece in her hour of need. However, I doubt seriously that the US would be able to turn its back on California or New York should these states fall into default. The European Union is not the United States.

Germany (green) and Greece (orange)

Related Posts:

Greece: What Economic Austerity Looks Like

How Would Californians React to Economic Austerity...?

How Would New Yorkers React to Economic Austerity...?

1 comment:

Dr William J McKibbin said...

Below is a comment I recently posted in response that of a deficit hawk in the US:

I disagree with austerity measures as the solution for our economy, not because austerity does not make sense, but because austerity measures fail pragmatically. National economies can "solve" their deficit problems via three means: austerity, default, or inflation. Governments will never allow a default, and the people will not tolerate austerity. That leaves monetary expansion (or "printing money") leading to inflation. More on how monetary expansion can solve our deficit issues at:

http://wjmc.blogspot.com/2010/05/using-inflation-to-reduce-public-debt.html

Recall that Hooverism (austerity) failed in the 1930's and lead to four consecutive terms of FDR (fiscal expansion). Likewise today, the demands for postmodernization are louder than ever. Austerity works for the minority with wealth alone. What America needs is a plan that works for a super-majority of the people. The time of elitism (<1% make the decisions) is long over, and the time of populism (51% makes the decisions) is now collapsing before our eyes -- pluralism (>68% make the decisions) and postmodernization (the needs of humankind and biosphere become imperatives) are the future. Looking backwards has no place in the 21st century. More at:

http://wjmc.blogspot.com/2010/06/on-postmodernization.html

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