Irresponsible debt policies and theories
- Gerardo E. Martínez-Solanas
- Category: Toma nota.../Take note...
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Peoples who have enjoyed undeserved and artificial prosperity based on the irresponsible growth of public debt, now reject the austerity measures needed to balance its current accounts. There are many economists who are preaching greater budget expenditures to generate more wealth, overcome the recession and reduce unemployment, without taking into account that the rising debt sooner or later we all have to pay for it.
Monetary policy is the secret ingredient to bringing down public debt
Goals: Restore competitiveness only through domestic deflation, not devaluation, and reduce debt only through austerity
Sept. 30.─ Politicians across the rich world are quarrelling over how to deal with public debt. Yet the most important actors in the drama may be unelected central bankers, according to a study by the International Monetary Fund, published in its latest economic outlook. The IMF looked at 26 episodes since 1875 when debt topped 100% of GDP, to determine how those ratios got back down.
Growth, spending cuts and tax increases did their bit, but the make-or-break factor was monetary policy.Read more ...