premature austerity

Steve Keen:

It’s a nonsense neoclassical fantasy to blame this crisis on government debt, when its underlying cause has always been a private sector debt bubble that has now burst.

The last thing we need is for the public sector to also be pulling money out of circulation.

Paul Krugman:

Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.

Bill Gross, founder Pimco:

…debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease.