There is no doubt that a resolution of the Greek crisis is a desirable objective but there is also no doubt in my mind that increasing austerity in Greece on the backs of hard pressed pensioners and the middle classes is a very bad idea. As Larry Elliot and others including me have argued austerity is the worst possible policy because it undermines aggregate demand and reinforces a debt deflation spiral. It beggars belief that the creditors are still insisting on further austerity and display such extraordinary historical ignorance of the 1930s and the massive failure of such policies during the last great depression.
There are a number of voices and opinions worth reading on this question. Have a look at this article:http://www.voxeu.org/article/programme-greece-follow-imf-s-research by a Princeton based professor of international economic policy on the pitfalls of overdoing austerity. The author Professor Ashoka Mody is no radical but a very mainstream professor and although he proposes a very minimal primary surplus over the next three years of 0.5 % of the GDP,whereas I would propose running a stimulative infrastructure focused deficit, he nevertheless appreciates the importance of growing the Greek economy and also proposes substantial debt forgiveness as much as 50 % and repayment over forty years of the rest.
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About haroldchorneyeconomist
I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
haroldchorneyeconomist 