austerity

The following is a statement issued by Herbert Hoover's White House on 2 June 1931 regarding the federal budget deficit for the year. I have highlighted the parts most relevant to today's situation.

The ECB President admitted that budgets cuts and tax increases are contractionary -“in the short term” he added - but there are two ways to lessen their negative impact on growth: the confidence-enhancing effect that will follow the new…

The British decision to veto the proposed new EU treaty is not surprisingly provoking an avalanche of commentary this weekend. Among journalists, at least, there seems to be a consensus that David Cameron committed some kind of major…

The following letter from the German Chancellor and the French President was addressed to European Council President Herman Van Rompuy

News links for 7 December 2011 featuring thoughts on a French downgrade, the austerity budget in Ireland, patents and China and other stories

What must the summit produce in order to address these and help solve the Europe crisis once and for all? The answer is very much in keeping with Wolfgang Munchau’s excellent take in his column in yesterday’s FT. Hopes have coalesced around…

In the aftermath of the emergence of a “reinforced ‘Stability and Growth Pact’”, Citigroup chief economist Willem Buiter is pessimistic about growth outcomes in the major developed economies because the political economy of the sovereign…

Italy's government has come forward with an aggressive 30 billion euro austerity package to prevent the country's bankrupcty and pave the way for the fiscal integration that Angela Merkel is pushing as the key to solving the European debt…

My takeaway from two days in DC is that Europe is headed to a blood in the streets outcome. While ECB funding remains ongoing even as it’s uncertain, in any case, the underlying theme remains austerity. There is no plan B.

The prevailing view amongst euro area policy makers seems to be that saving Italy from default is necessary and that the only politically justifiable way to effect this rescue is to move to fiscal integration. All of the statements by…