Silvio Berlusconi's offer to give us back the 4 billion euros removed by the Save Italy decrees of the Monti administration is causing ructions. Reactions range from vulgar abuse (Bersani) Can you believe him?, (Monti) to detailed analyses of why it isn't possible to return us our money (Il Fatto Quotidiano and various other media).
Assorted keynesians - neo-keynesians have told us that austerity in the face of recession makes it worse, makes depression inevitable, is folly, is 'unfair', and that Paul Krugman and Joseph Stiglitz have Nobel prizes so there we are.
Curbing demand causes depression. Curbing consumer demand does it quicker.
So why is the Left not celebrating Berlusca giving every household in Italy its billions of euros back? This is accurately targeted helicoptering on every household in the country. We will spend it, we promise. We are going hungry, and bankrupt because it was taken from us in the first place - just like Stiglitz and Krugman said we would.
Monti is in a slightly better position with "Can you believe him?' Time will tell is the only answer to that.
The last argument 'there isn't any money to give it back' we know is unfounded because the government is even as we write pushing 4 billion euros at the Monte dei Paschi bank. That'll do, we'll use that. Let the Bank sink or swim. (We've been here before with Northern Rock and Mervyn King made the wrong choice. Under capitalism there is an order:wages, secured creditors, unsecured creditors, shareholders (if there's anything left by then).
Either we're all progressive keynesians now and Krugman is our guide, and money grows on trees , or the Left in all its motley is being disingenuous.
Marginal Revolution on Kleptocracy
4 hours ago