What is most notable about the UK Debt downgrade is not the downgrade itself, but the text. Moody’s is NOT attributing their downgrade to the usual mantras from the austerity caucus such as “fiscal profligacy” and “bond market vigilantes.”Instead they are blaming “slow intermediate term growth” and, most importantly, blaming that slow growth on “the ongoing domestic public- and private-sector deleveraging process.”The Economic Maverick
Obviously, as the MMTers know too well, concerns of a technical default are misplaced because the UK, (like the US, Japan, Canada, Australia, Switzerland, etc) is an autonomous fiat currency issuer and therefore can’t default on its debt unless it chooses to do so. However, implied in the text are the exact concerns that non-austerians of all disciplines have been repeating incessantly: Austerity in a downtown [down time?] is counter-productive even to the goal of reducing public debt because it hinders growth and therefore impairs the capacity of the economy to generate revenue and repay the debt. This is doubly true after a credit bubble bust because the private sector is deleveraging in an effort to fix its own debt problems. Any efforts by the public sector to simultaneously deleverage will backfire.
BOLLOCKS! Moody's Downgrades UK debt for first time in history. Blames AUSTERITY!
2 comments:
Moody's report states repeatedly that it has faith in Britain's ability to repay debts because of it's commitment to fiscal consolidation.
The report is self-contradictory gobbledy-gook; do the authors have anything resembling an education? There was a time introductory logic was required at the undergraduate level.
This "reasoning" is called sophistry, and it is really ideological advocacy designed to baffle with BS while putting across a neoliberal message.
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