It's not easy being a liberal.
There is an article at the Economist which asks: "The Hangover; America is Recovering from the Debt Bust Faster than European Countries. Why?"
If I'm summarizing this correctly, it seems to come down to a reduction of household debt. And that reduction is due mostly to foreclosures. Whereas in Europe, people are hanging onto their houses -- and their debt -- more often.
The liberal part of me says, Good for them! That's seems more humane.
The other part (dare I say conservative?) is aware that historically, economies which deal with household debt recover faster and eventually increases in productivity bring the economy back which is good for everyone.
The other part of the equation is, that the U.S. (the federal government, but not the state and local) has continued public spending, unlike the austerity measures in Europe. This is the liberal side of me, agreeing with Krugman that we need to spend money.
Again, historically, if the private debt is dealt with first, the public debt is taken care of by increases in productivity. This is a lot like my business, where cutting is not always the right thing to do in the face of a slowdown. Indeed, I think I'm still around because I've sometimes made the decision to increase spending at a time when everyone else is cutting back.
Finally -- such soul searching comes from my liberal side.
So, overall, I'm still a liberal, right?
5 days ago