This paper was published in the Thomson Reuters Journal of Business Accounting and Finance Perspectives in June 2020.
By Dr. Daniel Lacalle
(Author of “Freedom Or Equality”, “Escape from the Central Bank Trap”, “The Energy World Is Flat” and “Life In The Financial Markets”)
Keywords: Aggregate Demand, Aggregate Supply, Covid-19, Coronavirus, Fiscal Policy, Monetary Stimulus, Central Banks, Government, Crisis, Recovery, Demand-Side, Supply-Side.
JEL Classification: E52, E58, H68, H25, H30, H51
There is no solidarity without responsibility. The European Union Recovery Fund cannot be used as an excuse to perpetuate bloated political spending and create a transfer union where governments use taxpayers’ money to increase bureaucracy, because it would be the end of the European project. A union based on excess spending, debt and extractive policies would be destroyed in a few years. The strength of a unified group of countries comes from diversity and responsibility.
Continue reading The “Frugal” Countries Are RightAccording to the IMF, global fiscal support in response to the crisis will be more than 9 trillion US dollars, approximately 12% of world GDP. This premature, clearly rushed, probably excessive, and often misguided chain of so-called stimulus plans will distort public finances in a way in which we have not seen since World War II. The enormous increase in public spending and the fall in output will lead to a global government debt figure close to 105% of GDP.
Continue reading The World Is Drowning In DebtThe United States recovered 4.8 million jobs in June, adding to May’s 2.5 million jobs rebound. The United States employment recovery is faster and stronger than the Eurozone one, which has over 40 million workers on subsidized jobless schemes added to a 7.4% unemployment that is expected to rise to 11% by September.
Continue reading The Slow And Painful Path To Jobs Recovery