The European Vice
Courtesy of Joshua Brown, The Reformed Broker
Start here today (NYT):
FRANKFURT — Citizens from Prague to Paris to Amsterdam have made it abundantly clear the last few days that they are tired of the economic austerity forced on them by the euro zone debt crisis.
But as the budget-cutting pain of reduced government benefits and social services brings protesters to the streets and drives support for nationalist or far-left parties, it is not clear what the economic alternative might be. Rejecting austerity budgets in favor of more government spending will not automatically ensure economic growth, many economists say.
This stuff matters again, Felix Zulauf's been talking about the spring 2012 administration/election season as something to watch for since early last year. The idea of spending to engender some growth is nice, until you remember that there simply is no money to do so and no willing lenders without the "major reforms" strings-attached.
The governments continue to topple as the divide between the Austerians and the Stimulistas grows with every passing recessionary day.
Source:
A Europe Tired of Cutbacks Has Few Alternatives (NYT)
