28 June 2015

On the "GREXIT"

David Atkins in Washington Monthly Political Animal blog:

It seems like a presumptuous and arrogant thing to say, but the most respected centrist economic voices both here and abroad simply don't understand how modern economies actually work, and what is wrong with them. Taxation on the wealthy doesn't harm growth. Recession-induced deficits aren't best cured with doses of austerity. The problem, generally, is a lack of adequate consumer demand—not an excess of spending or taxation. It's shocking that these facts aren't more obvious and well-understood. Or maybe they are, and it's simply not in the interest of the financial elite to understand them.

Either way, if the creditors hold firm to their austerity demands and Greek leaders (rightly) remain firm in taking the deal to their own people, we could see Greece exit the Eurozone. And from there, who know what other countries might follow suit in the contagion.

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