The New York Times (July 30)
Just when “the economy needs more spending,” everyone is focused on the debt limit and spending cuts. “The premature budget tightening of 1937… reignited the Depression,” and increasingly we look posed to make the same mistakes. The Times does not argue for unlimited spending. “Budget cuts are unavoidable — but they are not urgent. With the economy weak and interest rates low, austerity makes no sense.”
The Economist (June 30)
Markets breathed a sigh of relief when Greece passed recent austerity measures, but the “new plan to cut Greece’s debt looks doomed to fail.” The plan is both too draconian and too light on real reform. “It does too little to prevent the epic folly of Greece’s railways and other ruinous schemes. It will screw down too hard on ordinary Greeks, with new taxes, spending cuts and a rushed privatisation scheme. And it will almost certainly condemn Greece to recession, strife and an eventual debt default.”
