Mandel and Keynes

Doug Henwood dhenwood at
Thu Sep 17 11:07:55 PDT 1998

Michael Cohen wrote:

>> The fiscal tightening across the OECD has been pretty stunning. According
>> to OECD estimates, the cyclically adjusted deficit in the EU was -5.3% of
>> GDP; it's likely to be around -1.5% this year, a shift of 3.8 percentage
>> point. The U.S. went from -4.0% to 0.0%, a shift of 4 percentage points....
>Doug, do you any ideas as to why you think this is. It doesn't seem likethe
>most intelligent move in this situation. Given the economic crisis is
>what its trumped up to be for the First World

One of two choices - they want a slowdown, to cool stock markets and inflationary labor market pressures (the Germans, under the influence of god knows what drug, are worried about inflation), or they believe that budget balancing is good for you (i.e., promotes noninflationary growth).


More information about the lbo-talk mailing list