This is an amazing article by Paul Krugman, liberal, Nobel Prize winning economist, written as a book review in the NYT. I would recommend it as a MUST-READ article. Check it out!
Clearly, Krugman feels very passionately about excessive austerity and I personally very much endorse his views. The article is basically a book review of:
Austerity: The History of a Dangerous Idea
by Mark Blyth
Oxford University Press, 288 pp., $24.95
The article criticizes the ECB and the EU for blindly sticking to excessive austerity, very much a proxy for Germany. However, the article recognizes that the other troika partner, the IMF, is now having second thoughts.
This week we have seen the German media increasingly challenge excessive austerity, and stark comparisons of Japanese growth compared to excessive austerity in Europe. Also there has been hard evidence linking excessive austerity and an increased rate of suicides.
Surely, enough is enough, with millions and millions of people unnecessarily out of work in Southern Europe, the UK and the US because of excessive austerity?
Perhaps, we shall need to see the results of the German elections in September but I predict a softening of German policy on austerity; certainly, it would be relatively easy for Germany to reflate providing stimulus to recession torn Southern Europe.