Tags: Robert Reich | global recession | austerity measures

Reich: Austerity is 'Wrong Medicine'

Friday, 19 Aug 2011 10:51 AM

Economist Robert Reich says we're about to head into global recession.

 

"Not only is the United States slouching toward a double dip, but so is Europe. New data out today show even Europe’s strongest core economies – Germany, France, and the Netherlands – slowing to a crawl," Reich writes in his blog. "We’re on the cusp of a global recession."

 

"Policy makers be warned: Austerity is the wrong medicine."

 

Reich says a big part of Europe’s slowdown can be chalked up to the politics and economics of austerity.

 

"Europe – including Britain – have turned John Maynard Keynes on his head," says Reich. "They’ve been cutting public spending just when they should be spending more to counteract slowing private spending."

 

Reich sees the United States as moving in the same bizarre direction.

 

"Cutbacks by state and local governments have all but negated the federal government’s original stimulus, and no one in Washington is talking seriously about a second," he says.

 

"The pitiful showdown over increasing the debt limit has produced the opposite: a Rube-Goldberg-like process for capping spending rather than increasing it, and a public that’s being sold the Republican lie that less government spending means more jobs."

 

Public debt, says Reich, has meaning only in relation to a nation’s gross domestic product.

 

“When more people are working, more companies are profiting, and economies are expanding, revenues pour into national treasuries,” he says. “When economies stop growing or contract, the opposite occurs. That’s what we’re seeing now.”

 

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Economist Robert Reich says we're about to head into global recession. Not only is the United States slouching toward a double dip, but so is Europe. New data out today show even Europe s strongest core economies Germany, France, and the Netherlands slowing to a crawl,...
Robert Reich,global recession,austerity measures
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2011-51-19
Friday, 19 Aug 2011 10:51 AM
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