alling high unemployment the “new normal” is a lazy way to cover up poor fiscal policy.
We are now starting to see the economic impact of the ‘new normal’ in practice, as Paul Krugman outlined the other day. Having been bullied into adopting austerity measures apparently thinking they will help their economies grow, it is beginning to dawn on many “Austerian” governments that their embrace of hair shirt economics is beginning to undermine growth.
Exhibit A is the United Kingdom. The NY Times gave an account of British towns “reeling” from the implementation of nationwide expenditure cuts of some $130 billion introduced in last June’s budget. “A mass execution without appeal” is how the Times described it.
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