Wednesday, 11 March 2015

Piketty on the EU

Somewhat rushed this week so I'm just picking up the story that Clarkson has eaten a newly born infant or something, but I did have a chortle at what may be a Damascene conversion from young Piketty;
The (Stability) pact is a true catastrophe. Setting fixed deficit rules for the future cannot work. You can't solve debt problems with automatic rules that are always applied in the same way, regardless of differences in economic conditions.


Budgie said...

An interesting read, thank you Raedwald. Notice there is no mention of the UK at all. Now that really is interesting.

Mike Spilligan said...

Budgie: Perhaps Piketty believes, like others, that the UK is not only not in the euro, but not really in the EU.
Like most economists, most of the time he leaves himself some leeway; but it reminds me of that expert economist, Nick Clegg, who said (in defence of his party's support for the euro) "nobody could have forecast what has happened" to it - just forgetting the scores who did, among them Martin Vander Weyer of whom I have as much respect as any of that breed.

Dave_G said...

Yes you can - if you're the EU that is.

Laws of economics don't apply to such a revered establishment as the EU. What THEY say is the real 'law' regardless of facts - so what's to complain about?

Bloke In Italy said...

Stopped clock??

Cascadian said...

But the problem HAS been solved, when government debt is due, the government pays for it buy issuing a new bond and buying it itself with fresh debt. It's the old pay your monthly credit card bill with the other banks credit card trick.

Nothing at all to worry about.

Need to pay for natural gas (like the Ukraine) go to the IMF and get a loan-simple as.

Need to pay welfare for the 25 % unemployed, issue a bond-simple as.

Don't even rely on financiers shunning your bonds, let the government buy them. The governments have the central banks in their pocket-no need to worry, the best brains and all that.

Britains current "austerity" (snork) will be financed by increased borrowing.

Budgie said...

Mike Spilligan said: "Budgie: Perhaps Piketty believes, like others, that the UK is not only not in the euro, but not really in the EU."

I had noticed that the UK was not in the euro myself, oddly enough. But then neither is the USA, which he does mention, a number of times. And whether M. Piketty thinks the UK is in the EU or not we are a fairly sizeable economy right on their doorstep which appears to have followed economic policies very similar to those he advocates for the eurozone.

We are also significant contributors to the IMF, which has helped bail out the eurozone. I just find it amusing that the French are ever ready to cite the UK in disapproval but where, as in this case, we have trodden before them, they are silent.