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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 4, 2010 / 27 Mar-Cheshvan, 5771

Europe says no to deficit-spending ‘stimulus’

By Jeff Jacoby

Jeff Jacoby




http://www.JewishWorldReview.com | More stimulus, anyone? Should Washington order another hefty round of Keynesian deficit spending in order to spur the limping US economy?

Absolutely, say many prominent economists.

Peter Diamond, a 2010 recipient of the Nobel Prize for Economics, argues in favor of "pursuing valuable expenditures now," by subsidizing state and local government payrolls and pouring money into "a vast amount" of construction projects. "Between the error of doing too little and doing too much," Diamond says, "doing too little seems to me to be the much greater risk." Joseph Stiglitz, another economics laureate, agrees: "We will see in the next two years the real cost of there not being a second round of stimulus," he told the Society of American Business Editors and Writers. "We will see the economy slow down at a very high economic cost."

So a big new stimulus package is the way to go?

Absolutely not, say many prominent economists.

"Please, no more government spending!" exclaims Vernon Smith, who won the Nobel Prize for Economics in 2002. Far from being the key to economic recovery, he insists, deficit "stimulus" will only make the economy worse. His skepticism echoes that of yet another winner of the economics Nobel, Gary Becker: "There is no serious evidence," Becker wrote in July, "that the $800 billion stimulus package passed over a year ago has had much stimulating effect on unemployment or GDP."

In short, there is no consensus. And if even the world's most esteemed economic theorists cannot decide whether a huge new spending bill would make the current crisis better or worse, guidance will have to come from somewhere else.

Perhaps that somewhere is Europe, where governments have deliberately rejected Washington's embrace of massive deficit spending as the best way to rev up an ailing economy -- with better outcomes than Americans have seen.

Britain was the birthplace of John Maynard Keynes, but the British government is pursuing precisely the opposite of a Keynesian approach to fiscal policy. Rather than trying to boost demand and create more jobs through extravagant increases in spending and debt, London is practicing austerity. The coalition government headed by Prime Minister David Cameron is sharply cutting public spending, pruning back everything from welfare benefits to the military. Even the sums allocated to maintain the Queen's household will be shrunk. About 8 percent of Britain's roughly 6 million public-sector jobs, or 490,000, will be eliminated.

"We have taken our country back from the brink of bankruptcy," George Osborne, the chancellor of the Exchequer, told the House of Commons. "There is nothing fair about running huge budget deficits and burdening future generations with the debts we ourselves are not prepared to pay."

Britain is not an outlier. Across Europe, The New York Times reports, "governments from Germany to Greece are slashing public outlays. . . . The debate in Europe is more on how fast to cut government spending rather than whether such reductions are the right thing to do. . . . In Europe there is hardly a policymaker to be found who is making the argument that governments need to spend more, not less."

Results so far? Economic growth in the United States has been weaker, and the loss of jobs steeper, than in the 16-country euro zone. Especially striking is the contrast with Germany, which resisted heavy US pressure to undertake substantial new deficit spending. While the US economy has been growing at an anemic annual rate of barely 2 percent in recent month, Germany's economy is currently soaring at a 9 percent annual rate. Unemployment in Germany has fallen to 7.5 percent, the lowest it has been in 18 years. Here, it has scarcely fallen at all. What does Berlin understand that Washington doesn't?

"Governments should not become addicted to borrowing as a quick fix to stimulate demand," the German finance minister, Wolfgang Schäuble, said in June, in response to the Obama administration's criticism of Germany's austerity measures. "Deficit spending cannot become a permanent state of affairs." President Obama, on the other hand, speaks blithely of "trillion-dollar deficits for years to come."

You can find economists to back up any point of view. Some will even tell you that the best way out of a hole brought on by too much debt is to dig even deeper into debt. The feeble US recovery suggests that the real world doesn't agree with those economists. Yesterday's election suggests that the voters don't, either.

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Jeff Jacoby is a Boston Globe columnist. Comment by clicking here.

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