Why I am obsessed by austerity – Simon Wren-Lewis – Mainly Macro

Dr Alf's Blog

austerity austerity (Photo credit: 401(K) 2013)

This is an excellent, MUST READ blog by leading Oxford economist, Simon Wren-Lewis. Check it out!

via mainly macro: Why I am obsessed by austerity.

Simon-Wren Lewis has become one of my latest heroes in his constant focus on the damage done by excessive austerity. Sadly, many UK newspapers have not reported the damage done from excessive austerity. AND, of course, David Cameron‘s Government has tried to deny the truth and the huge damage done from following ideological rather than evidence-based policy.

Simon Wren-Lewis explains the implications of the  latest evidence against the UK  Government, coming from the independent  OBR.

For me, even now, with the UK economy growing on the back of UK Government sponsored property inflation, there are major risks. Firstly, there is the risk of a property bubble and the UK’s own sub-prime crisis. Secondly, with so…

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Germany’s Sin – Paul Krugman – NYTimes.com

Paul Krugman, Laureate of the Sveriges Riksban...

Paul Krugman, Laureate of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2008 at a press conference at the Swedish Academy of Science in Stockholm (Photo credit: Wikipedia)

This is another excellent article by Nobel Prize winning, liberal, economist, Paul Krugman, in the NYT. It’s a MUST-READ, in my opinion. Check it out!

Germany’s Sin – NYTimes.com.

As I predicted a few days ago, attention would soon move from France to the Euro and then to Germany. See Krugman on on the Fall of France.

Krugman’s current article is actually more gentle than the title. It expands on recent arguments from Simon Wren-Lewis at Oxford and supports an excellent blog from the Economist today.

Let me restate my earlier conclusions.

So how should the World convince Angela Merkel‘s government to urgently support reflation across the Euro area? This needs to start in Germany, of course.

In my mind, we need to look to the fear of inflation and convince German people that the fear of deflation is much more serious than inflation. It is time for the mainstream media and the social media to convince German people that their deepest fear is really about deflation not inflation!

The alternative is probably the collapse of the Euro and that will bring even more pain – only decades later will historians call it “deflation”.