Krugman: How The Greek Government Is NOT Like A Family

Following up on the post upstream about Robert Reich, Paul Krugman expresses much the same notion in his post Losing the Belt. Consider the Greek government, says Krugman:

After all, you could view Greece as being like a family that overspent, got itself into debt, and whose members now have to do all the things families do when they get in that position: slash spending on inessentials, postpone medical care and other big expenses, quit their jobs and reduce their incomes — oh, wait.

That’s the key point, of course. When a family tightens its belt it doesn’t put itself out of a job. When a government tightens its belt in a depressed economy, it puts lots of people out of jobs; and this is a negative even from the government’s own, narrowly fiscal point of view, since a shrinking economy means less revenue.

My fear is that the Eurozone-imposed austerity measures in Greece will have precisely the effect on that nation that postponing medical care too often has on a family… economic disaster as irreparable to the body politic as medical disaster is to the human body. Again, let me emphasize: this does NOT have to happen. I suspect even European banksters know that, as loath as they are to admit it. We all know what to do; the problem is persuading the wealthy and powerful to do their rightful share. And we all need to lose the “belt” metaphor.

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