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Budget Austerity in the E.U.: Turning the Russian Invasion of Ukraine into an Advantage

With economic growth in the E.U. flat-lining in mid-2014 after a modest recovery, pressure mounted to relax the federal “austerity” constraints on the state budgets. According to The New York Times at the time, “(p)olitical and financial instability related to Russia’s confrontation with Ukraine and the effects of escalating economic sanctions between [the E.U.] and Russia have further clouded the economic outlook.”[1] Mired in the austerity vs. fiscal stimulus dichotomy, E.U. leaders may have been missing an opportunity here.

The entire essay is at “Budget Austerity in the E.U.



[1] Liz Alderman and Alison Smale, “Divisions Grow as a Downturn Rocks Europe,” August 29, 2014.

Continue reading Budget Austerity in the E.U.: Turning the Russian Invasion of Ukraine into an Advantage

Budget Austerity in the E.U.: Turning the Russian Invasion of Ukraine into an Advantage

With economic growth in the E.U. flat-lining in mid-2014 after a modest recovery, pressure mounted to relax the federal “austerity” constraints on the state budgets. According to The New York Times at the time, “(p)olitical and financial instability related to Russia’s confrontation with Ukraine and the effects of escalating economic sanctions between [the E.U.] and Russia have further clouded the economic outlook.”[1] Mired in the austerity vs. fiscal stimulus dichotomy, E.U. leaders may have been missing an opportunity here.

The entire essay is at “Budget Austerity in the E.U.



[1] Liz Alderman and Alison Smale, “Divisions Grow as a Downturn Rocks Europe,” August 29, 2014.

Continue reading Budget Austerity in the E.U.: Turning the Russian Invasion of Ukraine into an Advantage

Europe’s Problem Is Excessive Spending, not Austerity

It’s remarkable to read that European politicians are agitating to spend more money, supposedly to make up for “spending cuts” and austerity. To put it mildly, their Keynesian-based arguments reflect a reality-optional understanding of recent fiscal policy on the other side of the Atlantic. Here’s some of what Leonid Bershidsky wrote for Bloomberg. Just as […]

Continue reading Europe’s Problem Is Excessive Spending, not Austerity

Spending Restraint Is Good Short-Run Policy and Good Long-Run Policy

Regular readers know that good fiscal policy takes place when government spending grows slower than the private economy. Nations that maintain this Golden Rule for extended periods of time shrink the relative burden of government spending, thus enabling more growth by freeing up resources for the productive sector of the economy and creating leeway for […]

Continue reading Spending Restraint Is Good Short-Run Policy and Good Long-Run Policy

Spending Restraint Is Good Short-Run Policy and Good Long-Run Policy

Regular readers know that good fiscal policy takes place when government spending grows slower than the private economy. Nations that maintain this Golden Rule for extended periods of time shrink the relative burden of government spending, thus enabling more growth by freeing up resources for the productive sector of the economy and creating leeway for […]

Continue reading Spending Restraint Is Good Short-Run Policy and Good Long-Run Policy

The Missing Data in Krugman’s German Austerity Narrative

There’s an ongoing debate about Keynesian economics, stimulus spending, and various versions of fiscal austerity, and regular readers know I do everything possible to explain that you can promote added prosperity by reducing the burden of government spending. Simply stated, we get more jobs, output, and growth when resources are allocated by competitive markets. But […]

Continue reading The Missing Data in Krugman’s German Austerity Narrative