by Gico Dayanghirang
The lessons of the Great Depression in the 1930s and of the more recent recession in Japan should’ve provided EU policy makers with a definitive road map on how to deal with the Greek and Spanish recession and insolvency.
But they’ve decided instead to reinvent economics by imposing deep austerity measures instead of pump priming the Greek and Spanish economies.
As a consequence both countries are sinking deeper into debt despite massive debt refinancing because of continuing revenue shortfalls brought about by their failing economies.
The IMF is therefore right to insist that EU policy makers must urgently reconsider the continuing imposition of austerity measures because any further debt refinancing would just come to naught.
But EU policy makers are adamant on staying the course despite clear evidence that their policy prescription is only making things worse. I wonder what makes these otherwise intelligent, schooled and experienced policy makers foolish?
The same goes for the Tories in the UK and the Republicans in the USA. They also think alike and are just as mistakenly insistent.
In this regard, we’ve far superior policy makers here in the Philippines. Anticipating the possible consequences of a global recession, our policy makers have quickly pump primed the domestic economy with massive government spending particularly on public infrastructure.
Not only have they prevented recessionary contagion in this country but has managed to post a 6.1% GDP growth for the second quarter of this year.
Nice job gentlemen. Now if you can also manage to redistribute this economic gain to poorest of the poor in this country your place in heaven is assured.
This of course is the hard part considering our flawed socio-economic structure and our outrageous political culture. But there’s no harm in trying.
