The Bloomberg Op Ed article (August 19, 2014) – European Austerity Is a Myth – is about as flaky as it gets. The author is intent on justifying the article title by examining changes in government spending (as a per cent of GDP). He produces what he claims is “more appropriately called the ‘graph of the decade’”, which would mean it was some graph, but in reality tells us very little and does not provide the basis for his conclusion that rising government spending since 2007 is evidence that austerity has not been imposed. Oh dear! Some points need to be made.Bill Mitchell – billy blog
Austerity does not necessarily require a cut in government spendingBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia
"Italy was an outlier, paying senior government officials 12 times the national average salary, and will remain one now that Renzi has capped civil servants' salaries at $321,000, about 10 times the national average. "
ReplyDeleteIf the govt pays people 10x the national average they are creating the inequality in the first place as "it is about price not quantity" and the govt is "price setter"....
So in Italy, the govt is largely responsible for any observed inequality in incomes/wages...
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ReplyDeleteWhat a load of crap. Funny how it's OK to pay senior executives millions of dollars a year and not to pay senior government executives at a competitive level to attract good personnel. Faulty logic there.
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