Friday, November 16, 2012

Europe Blows It

Europe's initial resistance to the crisis was aided by the automatic stabilizers built into large welfare state budgets, but then European leaders panicked as the very stabilizers that should have prevented collapse swelled deficits and came into conflict with post-Maastricht treaty commitments. Germany enforced a herd mentality. And Paul Krugman documents the result:

Stimulus has disappeared in the Eurozone and the UK, and both are in recession. The US continues to stimulate, and its economy is growing again, albeit slowly.

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