Monday Afternoon Links: Europe is back in the Spotlight

Europe, once again, has taken over the spotlight. This time, it appears that "austerity" measures are extremely unpopular and will not be a pill swallowed by their respective populations. Instead, everyone will hope that the Germans will just man up and support them. Except the Germans most likely will not want to support the Greeks. Despite what many pundits are saying, its not because of fear of WWII/Hitler/Inflation, its because Germans are a nation of savers, and inflation would f*ck that all up. Basically, if they inflate their way out of it, they will be telling everyone its totally cool if they get blasted at the party and puke everywhere, Germany will be the responsible adult who doesn't get too drunk so they can clean up the mess.

However, the current situation in Greece/Europe is probably something we should pay attention to. I've written before why Prof. Krugman's analysis of the situation is slightly off base, and this is just another great reason why we should be watching out debt in the US (vs. the Professor's preferred method of just inflating our way to growth) - debt funded growth only exists as long as the government money keeps flowing; once our wise leaders turn off the tap (or are forced to as the Greeks were), the economy comes tumbling down. If you need more examples, just look to China. But, we also need to make sure we have real government cutbacks, because in Europe, that hasn't really been the case. Their "austerity" has been just higher taxes on the rich, and no new government spending. That probably hurts Prof. Krugman's case a bit more, huh? If higher taxes are adding additional pain to growth? But you don't have to take my word for it, just ask Obama's former Chief Economist, Christina Romer... she writes "Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by 3 percent. The effect is highly significant" Ouch, maybe those pesky conservatives were on to something...

But hey, maybe this seems like fun and we'd like a try?

Happy Monday, and remember today is one of those days you're working for free (because the government is taking it for all the opportunities you were given, and a whole bunch of welfare)