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View my latest photo on Flickr: http://flic.kr/u/RhFpf/aHsjKCP6PH Lego bomb

Austerity pushing Europe into social and economic decline, says Red Cross

Austerity pushing Europe into social and economic decline, says Red Cross

“Many from the middle class have spiralled down to poverty. The amount of people depending on Red Cross food distributions in 22 of the surveyed countries has increased by 75% between 2009 and 2012. More people are getting poor, the poor are getting poorer.”

Sad thing is that many will read that and blame the Red Cross handouts for creating poverty and dependance. 

Austerity isn’t working. 

The Debt Ceiling and the Housing Bust

The Debt Ceiling and the Housing Bust

You can argue that these spending cuts wouldn’t have as much impact as the housing bust, because payment would be delayed, not cancelled, and at least some players would continue to expect eventual payment. On the other hand, as I pointed out in my last post, this time around we would have disconnected the automatic stabilizers — as GDP fell, revenues would fall, forcing another round of spending cuts, and so on.

GOP seems to prefer vicious cycles to virtuous ones. 

Krugman: Automatic Destabilizers

Krugman: Automatic Destabilizers

The immediate question is whether Treasury can, in fact, “prioritize” — pay interest on the debt while stiffing everyone else, from vendors to Social Security recipients. If they can, they might choose to do this to avoid financial meltdown.

My worry s that once people stop getting paid the GOP will decided that they have more leverage and make greater demands.