A Blatant Lie About Austerity
Call it a form of self-mutilation, but I keep going back to the NY Times to read Paul Krugman. And his latest article starts off with a blatant lie: "Austerity advocates predicted that spending cuts would bring quick dividends in the form of rising confidence, and that there would be few, if any, adverse effects on growth and jobs; but they were wrong."
Since the entire premise of the article is based upon this lie, everything in the article is a complete waste of a thinking persons time.
EVERY austerity advocate has argued that there would be a period of painful decline - 18 months to 2 years. The fact that Krugman names NO economist advocating austerity in his column is either proof he is blatantly lying or proof that he is entering an early stage of senility. If he understood Austrian economics, he would realize that austerity would put a country "on the path to recovery". That path includes a SHARP decline in prices, higher unemployment and economic pain as the system cleanses itself.
Think about a heroin addict. He's got to quit and he's got to go through withdrawal symptoms. Those withdrawal symptoms are PAINFUL. Krugman is advocating to keep the heroin flowing, but slowly wean ourselves off the high debts when we are "back to normal". Of course THAT will cause withdrawal symptoms (aka: recession) and he'll be back on his bandwagon telling us that when in a recession, we have to take on more debt.
I disagree with some Austrian economist who believe there will be a sudden change of faith where dollar confidence is lost. Instead we will go the way of Britain, and be a 2nd rate country working our way to 3rd rate.