Friday, November 9, 2012
Europe Is Doing What The US Did In 1937
FDR's New Deal got the US out of recession but it also left the government in a large budget deficit. FDR decided to impose austerity in order to reduce the budget deficit. The economy slipped back into recession and it was not ended until the US military build up, prior to WW ll, produced even larger budget deficits. After the war, the private economy revived, and we were able to pay down the debt quickly. This article uses data from the IMF which suggests that Europe is making fiscal policy decisions that will lead to recession, much like the US did in 1937.