Paul Krugman, a professor at Princeton and a Nobel Laureate, is specialised on international trade and finance. His current work is focused on economic and currency crises, and he is one of the preeminent economists of our time. I am inclined to trust his verdict.
He calls the GOP budget plan voodoo economics.
“A plan that proposes to cut spending to Calving Coolidge levels, without explaining how it will do that; that includes $2.9 trillion in tax cuts, but asserts that it will make that up by broadening the base — yet says literally nothing about what that means; and has as its centerpiece a Medicare plan that will collapse as soon as seniors start getting their grossly inadequate vouchers.”
I am not an economist, but I’d say he has a point.
The European Union has just granted an € 90 bn bailout to Portugal. A tiny country at the edge of the continent, a tiny strip at the Atlantic coast with a level of debt about 230% of it’s GDP and the lowest economic growth in Europe. At least, they do not owe the crisis to the reckless gambling habits of their banking system, but they had since seen their credit ratings downgraded to dangerous levels. At the same time as austerity plans are imposed on European countries, the European Central Bank raises the interest rate.
And how is this supposed to stimulate the economy ?
Continue reading →
48.237489
16.355674