From today’s New York Times:
The world’s rich countries are now conducting a dangerous experiment. They are repeating an economic policy out of the 1930s — starting to cut spending and raise taxes before a recovery is assured — and hoping today’s situation is different enough to assure a different outcome.
In effect, policy makers are betting that the private sector can make up for the withdrawal of stimulus over the next couple of years. If they’re right, they will have made a head start on closing their enormous budget deficits. If they’re wrong, they may set off a vicious new cycle, in which public spending cuts weaken the world economy and beget new private spending cuts.
Remember, according to Stephen Harper, it’s a “Canadian-led plan.”
A rigorous and theoretical rejection of Stephen Harper’s “Canadian-led plan” may be found in Canadian, Bernard Lonergan’s Collected Works [U of T press] vols. 15 & 21. MACROECONOMIC DYNAMIC ANALYSIS: CIRCULATION ANALYSIS [vol. 15] and FOR A NEW POLITICAL ECONOMY [vol. 21]. A popular account of Lonergan’s position is presented in Eileen deNeeve’ DECODING THE ECONOMY [Thomas More Institute of Montreal/ Papers] along with excerpts from Lonergan’s writings on the plague of the Multinational Corporations.