10/01/2008

The A-word and the BAILOUT

October 1st's Boston Globe had a thought provoking quotation from Juan Enriqez on the BAILOUT.  I discovered it on the TEDBlog

WITHIN THE billions of sentences about the financial bailout there is one word notably absent, austerity. All talk is of payments, supports, subsidies, incurring more debt, stimulus packages. The thesis seems to be: If only we spend more, the party can go on. True, only if the financial meltdown is a temporary mismatch and dislocation in housing and credit markets. But suppose there is something fundamentally wrong with the US economy. Then spending more will not fix it. Getting the diagnosis right means getting the treatment right. It may save us a trillion or two.

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