Austerity or growth? It’s worse than that

In this new post on, Sam Brazys critiques the austerity versus growth framing of economic choices for Europe. He focuses on Ireland but other Eurozone members (think Spain) also face a massive problem of household indebtedness due to mortgage arrears whose implications Eurozone governments are just beginning to face. Not only is there no simple solution to this problem, as Brazys points out, but the export cushion provided by relatively strong growth in the US will be removed next year when stimulus spending and tax cuts there are replaced by massive and legally mandated cuts to the federal budget, which will only compound the deflationary effects of earlier reductions in federal support for state and local budgets.

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