FionaK |
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| As everyone knows, the song sung by the IMF, ECB, and many other national and international bodies is that there is a need for radical restructuring of most economies so that they are fiscally sustainable. We are invited to believe that there is something objective about the rules imposed on countries in the EU by the Stability and Growth pact, and that sticking to those rules will somehow make things ok in the long run (when, you will remember, we are all dead). One of those rules is that government deficit should not exceed 3% of GDP or the sky will fall. Did it ever occur to you to ask where that figure came from? Probably you thought there was some theoretical underpinning? Something objective about it? Well, it turns out that the man who invented it can tell us something about it: and he did, back in September 2012. I just came across it. This is what he had to say: QUOTE We came up with the 3% figure in less than an hour. It was a back of an envelope calculation, without any theoretical reflection. So you life is being ruined for no defensible reason at all if you happen to live in Europe. Can't say I am surprised. http://www.presseurop.eu/en/content/news-b...inally-revealed |
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