Posted by Bob Janova at 12:59pm Apr 27 '12Recession is a technical term and I don't think it means much, but the UK is officially there already if the preliminary figures are correct, and much of Europe will definitely contract this quarter.
I also think it's more subtle than austerity vs stimulus, though. And you can only 'stimulate' as long as your creditor nations are prepared to prop up your deficit; the US seems to manage to get that confidence from major institutions and foreign countries even though your deficit is enormous, so you don't have market pressure to cut it (which pushes austerity).
The US is in for a huge second dip if the market loses faith in your ability to spend your way out of trouble.
I also think it's more subtle than austerity vs stimulus, though. And you can only 'stimulate' as long as your creditor nations are prepared to prop up your deficit; the US seems to manage to get that confidence from major institutions and foreign countries even though your deficit is enormous, so you don't have market pressure to cut it (which pushes austerity).
The US is in for a huge second dip if the market loses faith in your ability to spend your way out of trouble.
Yes. - Bob Janova