Euro Budget Craziness
05/15/2012 | | Economic cycles, Euro Zone instability, European Stability and Growth Pact, Recession
The European Stability and Growth Pact, that Germany is insisting on –-which requires governments to keep deficits to no more than 3% of GDP — is nuts. In good times, it promotes increased government spending but forces cuts in recessions. This exacerbates economic cycles and is the opposite of good policy. As long as it survives, Europe will lurch from boom to bust! It must be changed.