NEW CANAAN, Conn. (MarketWatch) — Lots of little things seem to be contributing to the strength of the market, but there does also seem to be a belief that Germany finally “gets it.”
Germany is finally going to relent on their demands for austerity. Read Minyanville’s “Spain: Too Big to Fail and Too Big to Save.”
Programs that are providing money today that is quickly re-circulated into the economy because it is paying for people to live, should not be cut — that is bad austerity.
Raising taxes in general is probably bad austerity, but what about actually collecting taxes on all those who have avoided paying what they owe? Plans to reduce long-term benefits must go forward — minimal current cost to the economy, but necessary for any long-term solution. So while “austerity” hasn’t worked, it is not all bad, and some forms need to be maintained to have any hope that the situation can be turned around in the future.
The second, and more important question is: Why does any sane person think spending for growth will work? Just pause for one moment. How were these massive deficits built up? Was all the spending frivolous? I don’t think so. A lot of spending was meant to target growth in certain areas. It is just very difficult to achieve
- Germany is undermining its own efforts to save the euro-zone (thepressnet.com)
- Yes, Austerity in Europe is Making a Major Fiscal Crisis Not Less But More Likely. Why Do You Ask? (delong.typepad.com)
- Zakaria: Europe suffers from too much austerity (globalpublicsquare.blogs.cnn.com)
- Fareed’s Take – April 22, 2012: “Consider this – the U.S. economy is on track to grow between 2 and 3 percent this year.” (cnnpressroom.blogs.cnn.com)