Economics · Politics

Economic Sanity Wins, Shocking!

I told you so. Obama right and Europe wrong about way out of Great Recession

Author: Larry Elliott

Since the recession, Britain and the US have outperformed the eurozone for the same reason they did better in the 1930s: they have made fewer macro-economic blunders. The Fed and the Bank of England were more aggressive in their use of monetary policy and when it came to fiscal policy, George Osborne quietly abandoned his original deficit reduction targets when the deleterious impact of an over-aggressive austerity strategy became apparent.

Expect France and Italy to follow a similar approach. François Hollande and Matteo Renzi will swear allegiance to the god of budgetary orthodoxy while at the same time borrowing and spending a bit more than they are supposed to. They should be applauded for doing so, because this god is a false god.

While you watch the GOP primary debates remember this article. They would have done the exact opposite. We also should credit George W. Bush, yes I said that. He along with the Democrats in Congress started us down the path to recovery that most in the GOP opposed (Google TARP). Just look around the world to see how well the other options worked.

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