Friday, June 3, 2011

Mélenchon Is Wrong

In the previous post I agree with Jean-Luc Mélenchon. In this one, I disagree. The right hand giveth, the left hand taketh away. Mélenchon writes:

Au rythme actuel de creusement du déficit fédéral [américain], ce chiffre doit avoir atteint les 1 600 milliards aujourd’hui. Avec plus de 1 400 milliards de trou en 2010, le déficit public états-unien dépasse les 10 % du PIB du pays. C’est-à-dire le même niveau de déficit qu’avait atteint la Grèce au printemps 2010 quand elle a été attaquée par les marchés. En valeur absolue, ce déficit public américain représente tout la richesse nationale de pays comme l’Espagne ou l’Inde. Et chaque jour ce trou se creuse en moyenne de 4 milliards de dollars de plus ! C'est-à-dire l’équivalent de la richesse nationale annuelle de la Guinée. A ce rythme le déficit fédéral devrait atteindre 1 600 milliards en 2011.

He doesn't seem to realize that his critique of the Federal Reserve "and its printing press" puts him on the side of economic cranks such as Ron Paul and that his critique of the federal debt puts him in bed with the Republicans who, suicidally, refuse to raise the debt limit. The faltering recovery in the U.S. requires more, not less, stimulus (= deficit spending) and therefore a larger federal debt. Mélenchon's right-wing Republican reading of the U.S. economic situation is a rather odd position for the candidate of the left of the French left to take. Sigh.

1 comment:

FrédéricLN said...

Well, thank you for the link. I read the post: I didn't feel Mélenchon's figures as a criticism against the US stimulus. He just underscores that the way it's financed makes the rest of the world, including our France (but China much more than us), pay for it.

The rest of the post suggests that we European, and especially the French, would be more productive, with a more efficient economy, that the United States, who would live at our expense. That's more funny - we may be more effective, but not that much.

The more accurate figure would be: we, Europe and the US, are basically in the same situation (even if the ECB cannot act exactly the same way as the FED). The Ponzi scheme in our public+private finance system since 2002 allowed us to live at the rest of the world's expense (a good part of that went in the pockets of oil-exporting countries, for sure).

What will be our remaining assets when our currency power will be over?

World trade is a serious game, those times.