In Ireland, a Picture of the High Cost of Austerity

[opebo]

Austerity now or collapse later?

Of course, it's not really like Ireland is being frugal in the larger sense.

No, the choice is between economy-growing public policy or permanent penury and mounting social problems.  The austerity that you espouse leads only to a downwards spiral of deflation and little or no growth.

[opebo]

But Beet, why couldn't the EU just inflate its way out of the so-called 'deficits'? Inflate and depreciate the Euro - eliminates the deficit and as a side benefit boosts the economy up wonderfully.

[opebo]

The state should be borrowing for stimulus and building infrastructure during economic downturns.  It is cheaper to build during these times because of depressed labor markets and lower prices for equipment/goods.

The debt should then be paid back during expansion periods with excess revenue brought in through raised taxes (again, raised during expansion)

Yeah, that's classic Keynesian mythology, but it's not how things work in the real world.

Actually that's a rather poor bastardization of Keynes.  I'm sure he'd prefer that all the money go directly into the hands of poors who would spend it immediately.  The silly argument about infrastructure is just to sell it politically - it has no economic value.

Remember, the ultimate Keynesian policy is bales of cash dropped from helicopters into the ghetto.  Anything less redistributive is a bit, well, of a bastardization.