In my never-ending crusade to push for the right kind of austerity, I appeared on RT to pontificate on the merits of limited government.
We got to cover a lot of material, so here’s some augmenting material.
1. The right kind of “austerity” is less government spending, which is why I’m very frustrated that the fight in Europe is largely between Keynesians who support more spending and IMF types who advocate higher taxes.
2. I explain why Keynesian economics is misguided, in part because government can’t spend money without taking resources from the productive sector of the economy and in part because politicians never follow through on Keynesian prescriptions for fiscal restraint when the economy is strong..
3. In an example of how to damn with faint praise, I give the International Monetary Fund credit for understanding that 2+2=4, though I also criticize the IMF for shifting from one bad approach (higher taxes) to another bad approach (Keynesian spending).
4. We discuss how many European nations got in trouble and then looked at how various governments responded to the crisis. Not surprisingly, I praise Switzerland for never getting in trouble and I commend the Baltic nations for rectifying their mistakes with genuine spending cuts.
5. I even give the “PIIGS” credit for slowing the growth of spending, albeit only after they had exhausted every possible bad policy option.
6. Not all government spending is created equal and I explain that Europe’s problem is that far too much money is spent on the welfare state.
7. I close with some analysis of the data fight between Senator Sheldon Whitehouse and the Heritage Foundation. As I’ve already explained, the Senator was the one relying on speculative data.
Showing that I have a tiny bit of non-economic knowledge, I even quoted Saint Augustine, though I’m sure he would be horribly offended that I indirectly equated him with politicians.