Tuesday, July 7, 2015

Bill Mitchell — Greece should not accept any further austerity – full stop!

To repeat myself (for the nth time, where n is a large number):
A basic rule of macroeconomics is that spending equals income, which leads to output and employment.
Someone’s spending is another person’s income. There has to be growth in spending for income and output to grow.
If there is unemployment it means that total spending is insufficient to generate enough output and hence jobs to satisfy the preferences for work of the unemployed.
The solution is always for the government to either directly increase spending to lift sales in the private sector and stimulate further income and/or to cut taxes, which might lead to higher private spending....
Bill Mitchell – billy blog
Greece should not accept any further austerity – full stop!
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Dan Lynch said...

"It is not the debt relief that matters in the coming months but the ongoing austerity."

Prolly correct, but Bill needs to read Mike Norman's post about "austerity is not going away."

lastgreek said...


Did you read Michael Nevradakis article today, "Greece Referendum: Syriza Didn't Get the Message"? Worth the read, and it would be worth posting the article on the blog. MN also gives his take on YV when he first met him at the University of Texas. Not pretty. Here is an excerpt:

In case it is still unclear, the writing on the wall is as follows: Tsipras and his government are going hard for a new agreement that will not be popular, and which will not be much different from the proposals which Greek voters said “no” to. A new agreement perhaps not markedly different from the 47-page proposal submitted by SYRIZA prior to the referendum being called, which included the implementation of a primary budget surplus of almost 1% beginning this year (even though Greece is currently in deficit and would therefore need to cut its way back to a surplus), dozens of privatizations in a program that would continue well past 2020, making permanent many previously “temporary” taxes which SYRIZA had declared unconstitutional prior to the elections, and pledges to honor Greece’s debt commitments. And this time around, whatever the proposal is, either on the part of the government or the “institutions,” the Greek people won’t be given the option to say “yay” or “nay.” Notably, with the “vote of support” Tsipras received today, he has the backing of the same pro-austerity political forces—New Democracy, PASOK, To Potami, and the far-right Golden Dawn—which, until yesterday, were urging the Greek public to vote “yes.”


Tom Hickey said...

Thanks. Promoted to a post.