Oh dear

[mrlloyd]

Given that I think the Eurozone, the UK and the USA have been persistently pursuing the wrong macro-economic strategy for more or less the last two years I suppose I shouldn't be surprised that we appear to be heading into, at the very least, an extended slump.

This is going to be really unpleasant, particularly since a lot of the political and

Comments

[undyingking]

Public understanding of economics is of course pretty hopeless, but I would have hoped it would be easier to get across the message that economic contraction directly worsens govt deficits, while govt spending for growth directly repays itself in reducing said deficits. But people seem to be obsessed with the notion that govt finances work like household finances. It is a severe communications failure.

One interesting thing about China's rise to power is that they may be a bit less tolerant of wealthy corporations and individuals avoiding taxation. Although their elites are I guess as corrupt as any other such group, they do seem to have a more managerialist rather than dogmatic approach to economic policy. For example, you can't see them ideologically shunning Keynesian reflation in the way we're seeing in the West.

[onebyone]

"govt spending for growth directly repays itself in reducing said deficits"

In a kind of Martingale way.

[undyingking]

Well, it would be if you continued it indefinitely. But when starting from a recessionary position, it's a pretty safe bet to carry on until you've reached break-even.

[metame]

I Am Not A Chinese Tax Lawyer...

...but the impression I got from chatting to people was that personal taxation was rather, ummm, optional. But that corporation tax was pretty strict.

Which probably works OK.

Not sure what the situation is for individuals as rich as corporations.