Thursday, October 11, 2012
IMF's Lagarde Wants Less Austerity
With the need for even more austerity in Europe, along with the abandonment of Keynesianism and socialism, it's pathetic to see IMF Managing Director Christine Lagarde say that the austerity measures European officials are attempting to require in order for nations to receive aid - are "harsh."
The usual ignorance surrounding economics by Lagarde and others is evident in the ongoing idea that actually dealing with the unsustainable debt problem in a practical manner would result in it hurting nations like Greece and Spain, which continue to attempt to extract more money from the eurozone while doing very little to meaningfully cut back on debt and spending.
How does cutting back on government spending present problems for growth? It doesn't if your a market economy and embrace real capitalism (not crony capitalism).
But when the idea that government has a right to interfere in economies is part of the mix, it creates outrageous problems like the sovereign debt crisis now faced by Europe. To think that government spending actually has a positive, long-term effect on any economy is thinking from a day before the fall of the Soviet Union and socialism. To attempt to revive it through out of control government spending is doomed to failure, and calls for anemic austerity measures is a way to allow this failing economic dinosaur to last a little longer, while threatening to take down the eurozone with it.
Lagarde wants to have these irresponsible countries, including Portugal with Greece and Spain, to have another two years to deal with the problems. But since the reality is they have done little but talk austerity as the money keeps pouring into them, all that will do is result in the debt load of the countries climbing even more. The region simply doesn't have people with the courage to take the needed steps that would heal the damage done for the socialist, Keynesian cancer spreading across the eurozone.
No economic radiation or chemotherapy will help the situation, neither will cutting out the source of the cancer. It's too late, as the entire area has been infected with the financial cancer, and the patient will have to allow itself to die before any chance of recovery begins.
That's because there are none who have the will to take the needed steps to ensure a long-term economic health recovery to the countries there.
The idea that austerity measures are a risk rather than a long-term cure only shows the lunatics are running the asylum, and whether anyone takes the needed steps or not, the economic conditions will force them to be taken in one form or another in the not too distant future.
What will come out of that will be the final death of socialism and Keynesianism (other than a few deluded dreamers who will always adhere to the failed theories and systems), which could result in a gravitation towards real free markets and capitalism, which offer the only hope for long-term economic success for the world.