Slowly, very slowly, with some silly procedures and delays, the program of saving Europe is being pushed through. Markets are nervous. Obama is nervous. Already stated that all the headaches in the world - from the Europeans slow.
It is assumed that a specific eurozone rescue plan will be adopted at the October 23 European Union summit. The European Stabilization Fund is expected to increase to 440 billion euros. Almost another 300 billion, if you count in euros, will give the International Monetary Fund. Due to what, the debt of the troubled countries of the eurozone, and first of all Greece, should be written off and the largest European banks recapitalized, whose sustainability is threatened by such a write-off.
Hedgehog clear that is not enough. Even for Europe alone, where the debts of 5 are troubled countries of 3 trillion euros. We need more and more. And where to get? It's clear to type. Nowhere else. Europe cannot print like that yet. Can not manage. And there is no such state. America is typing with might and main. But also, apparently, not enough. It should be much more, an order of magnitude more.
“What we need now is the economic equivalent of war. In fact, the Great Depression was nullified by the program of numerous public spending, better known as the Second World War,” said Nobel Prize winner in economics Paul Krugman.
Krugman is right. That is how it was. And somehow it will most likely be so. That is, he is not crazy and not a maniac and in sum, in general, correctly imagines everything.
As Krugman noted, the wars in Iraq and Afghanistan are incomparably small in relation to the size of the economy - "these are not big enough costs." According to the calculations of experts at Brown University (USA), the cumulative costs of the wars in Afghanistan, Iraq and related "counter-terrorism operations" exceeded 4 trillion dollars. At the same time, the cost of the Second World War, according to the budget management of the Congress, is 4,1 trillion in terms of today's prices.
The point is not even the scale of the economy, but the scale of debts that must be written off. And it is necessary to write off in 300 times more than in World War II. Hence, the economic equivalent of war should be more times in 300. That's what we love economists for. Here in economics, everything fits together: printed money, reset the debt - and walk yourself. Unfortunately (or fortunately?) For economists, large-scale economic phenomena are never limited to economics. Here's a nuisance: always the purity of the experiment is broken. Economic problems have the audacity to flow into the social and political.
We can already see the social equivalent of the Krugman program on the streets of American and European cities. This is like the beginning of the program. And there is also a political one. The political equivalent of a war spending program is war. Sorry, that's exactly what it will be. If only the most economically adequate plan for resolving the global crisis is implemented.
By the way, about all this - in our new project "American hole-3" in the very near future.