Consumption Gap Widens in Euro Zone

An international study on recessions and governments' responses to them has found that cuts to healthcare systems prompted by fiscal austerity are making matters far worse—for both governments and society.

Echoing sentiment that should be widely-held but unfortunately is not German central bank president  Jens Weidmann says Not ECB's Job to Tackle Spain's Problems. Spain should take a rise in its bond yields as a spur to tackle the root causes of its debt woes, not look to the European Central Bank to help by buying its bonds, European Central Bank policymaker Jens Weidmann told Reuters.

Yves here. It’s worth reading Jon Walker’s piece on the sequester gamesmanship along with Black’s take. It looks like Obama has administered a big self inflicted wound, although between his PR apparatus distancing him from reality, and it taking time for the sequester to hit the economy (as in it won’t generate the sort of quick pain needed to shift the political calculus), it will take a while for him to recognize that.*

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

The Swiss National Bank's investments in the government bonds of the euro-zone's safest economies have helped drive down yields and widened the gap with weaker states, according to Standard & Poor's.

The Swiss National Bank's investments in the government bonds of the euro-zone's safest economies have helped drive down yields and widened the gap with weaker states, according to Standard & Poor's.

That's the title of a piece my colleague Andrew Reschovsky has in the Fall La Follette Policy Report. With the admission of failure by the Supercommittee, it's important to recall the basic choices facing the Nation. In principle, solving the nation’s debt problems is easy. Almost all experts agree that a combination of reduced spending and increased tax revenues is needed.

Elliott R. Morss submits:In a recent two part series, I examined the arguments for greater stimulus or austerity in certain European countries and in the U.S.