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Saturday, July 21, 2012

European Austerity Now Is Insane.

Austerity when the econ0omy is in recession can only have disastrous results and is one of the stupidest ideas current being forced down the throats of common people. Austerity can't help but cause a retracting economy to retract further and faster. It reduces the active work force reducing the money being spent and the taxes being collected while increasing costs due to the strain on social services, which also get cut.

You don't revive a choking victim by further cutting off their air. You get rid of the blockage and get air into their system.

You don't stop a balloon far deflating farther by letting more air out. You fix the leaks and re-inflate.

Most of all, you don't prune a plant unless it is healthy. You prune strategically, leaving enough of each branch not to damage the tree. Otherwise you end up stripping it and it withers and dies.

When and economy is shrinking, stimulus is need and damn the deficit until the economy is stabilized and put back toward growth. Europe's crisis, like the rest of the world's, is one not of national debt, but of the international financial market. The banks lent out too much on gambles. The banks needed bailouts. This increased the deficits of countries.

Europe has a nice ideal target of a 3% deficit target, but it is just that, an ideal, meant for when economies are strong. Slavishly sticking to it now puts a strangling collar on the economy.

The only reason for sticking to it is so that financial markets aren't upset. Aren't they the ones that caused the whole mess? Europe is going through ridiculous and pointless hardship, to keep the gamblers happy that bankrupted the system. Without stimulus, not bailouts for debts, and the repair of the corruption rotting the system, this will just happen again, and Europe will inevitably spiral into depression or worse. Misery breeds violence.

Screw the 3%. Only the 1% care about it anyway. They are the only ones that will benefit from it. The rest will suffer.

Stop the insanity