“World Leaders Urge Growth, Not Austerity”, the New York Times headline reads. The lede states:
Leaders of the world’s richest countries banded together on Saturday to press Germany to back more pro-growth policies to halt the deepening debt crisis in Europe, as President Obama for the first time gained widespread support for his argument that Europe, and the United States by extension, cannot afford Chancellor Angela Merkel’s one-size-fits-all approach emphasizing austerity.
So more money printing, more borrowing, more government spending, more debt is defined as “growth”. These are “pro-growth policies”, whereas the idea of spending responsibly and having a balanced budget are defined as anti-“growth”.
This is pure Keynesian thinking, this idea that “growth” comes from spending, rather than from savings, investment, and production. But for the Times, this false dichotomy of—in its own words—“growth-versus-austerity” is axiomatic and unquestionable. As Nixon said, “We are all Keynesians now.” And we can see where this Keynesian nonsense about how we have to confront this “deepening debt crisis” by maintaining or going even further into debt has gotten us…
Welcome to the rabbit hole.