By Mark Weisbrot<\/p>\n
\n\tThe U.S. and European Union together make up about half of the global economy, and recovery is quite uncertain in both of these big economies. Contrary to a lot of folk wisdom and political posturing, the problem is not irresponsible government spending in either case, but a lack of commitment by the authorities in both areas to ensure a robust economic recovery from the world’s deepest recession since the Great Depression. This is true in many other countries as well.<\/p>\n
\tThe continued weakness of the U.S. economy was hammered home last week with the monthly employment report for May. The creation of only 20,000 non-Census jobs in May, down from 217,000 the previous month, sent shock waves through the financial markets.<\/p>\n
\tThe Eurozone’s problems are seen as driven by a financial crisis, and this is partly true, in the sense that financial markets have adopted a skeptical attitude towards the sovereign debt of Greece, Spain and some of the other weaker European economies.<\/p>\n
\tBut the Eurozone’s financial problems can also be resolved with a robust economic recovery. Spain’s economic problems, like those of the United States, were caused by the collapse of a huge real estate bubble. Its public debt, currently at a relatively low 60 percent of GDP, will be quite manageable when its economy is growing at a reasonable pace. In fact, it could be quite manageable right now, if only the European authorities would agree to finance its borrowing costs at a low (or even zero) interest rate until the economy is growing again. Spain has about $68 billion to borrow for the rest of the year; the cost to the Eurozone authorities of financing this at zero interest rates would be minimal.\n<\/p><\/blockquote>\n
Link<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"
By Mark Weisbrot The U.S. and European Union together make up about half of the global economy, and recovery is quite uncertain in both of these big economies. Contrary to a lot of folk wisdom and political posturing, the problem is not irresponsible government spending in either case, but a lack of commitment by the … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"koromo_page_header":"","footnotes":""},"categories":[4],"tags":[],"class_list":["post-11871","post","type-post","status-publish","format-standard","hentry","category-english-blog","koromo-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-50"],"_links":{"self":[{"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/post\/11871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/post"}],"about":[{"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/comments?post=11871"}],"version-history":[{"count":0,"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/post\/11871\/revisions"}],"wp:attachment":[{"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/media?parent=11871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/categories?post=11871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monochrom.at\/blog\/wp-json\/wp\/v2\/tags?post=11871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}