Paul Krugman warns severe austerity measures are pushing countries to brink of fascism [View all]

[Katashi_itto]

THe problem with ideologues is that they do not learn from their mistakes, not even after they repeat them and things go wrong again. Paul Krugman returns to one of his favorite subjects in his Friday column: the mismanagement of Greece’s fiscal crisis, which erupted five years ago and has ongoing terrible side effects that are damaging the whole world. “But I’m not talking about the side effects you may have in mind — spillovers from Greece’s Great Depression-level slump, or financial contagion to other debtors,” Krugman writes. “No, the truly disastrous effect of the Greek crisis was the way it distorted economic policy, as supposedly serious people around the world rushed to learn the wrong lessons.”

Greece is again in crisis and Krugman is wondering if (hoping that )the world will learn the right lesson this time.

The first time, the conversation became all about cutting government spending and obsessing over deficits. That this worsened unemployment and blocked any chance for growth was simply denied by fiscal austerity hucksters like British prime minister David Cameron and U.S. budget hawk Paul Ryan. We’re all going to be Greece, they hysterically warned. Minus the sunshine. Krugman:

In reality, Britain and the United States, which borrow in their own currencies, were and are nothing like Greece. If you thought otherwise in 2010, by now year after year of incredibly low interest rates and low inflation should have convinced you. And the experience of Greece and other European countries that were forced into harsh austerity measures should also have convinced you that slashing spending in a depressed economy is a really bad idea if you can avoid it. This is true even in the supposed success stories — Ireland, for example, is finally growing again, but it still has almost 11 percent unemployment, and twice that rate among young people.

http://www.rawstory.com/rs/2014/12/paul-krugman-warns-severe-austerity-measures-are-pushing-countries-to-brink-of-fascism/