ilia25
I can do math
- Jan 12, 2012
- 1,859
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There is a simple explanation why the austerity will be a disaster now:
1) Cutting spending depresses the economy (less demand for goods and services ==> less jobs)
no one is burning money so it disappears and net spending decreases. When you cut "government" waste spending you then leave the money in private hands where it can be used to create real sustainable growth.
And what if private hands are not inclined to spend its cash because, say, they want to reduce their debt and they do not want to expand their business because they already have more than enough capacity to serve the present weak demand? You think laying off a "waste" teacher would help?
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