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And that is an illusion. You are basically arguing that because the Bundesbanks sometimes talks as if the still matter, they still matter.

If they did not matter, they would be punished for breaking the rules of confidentiality that they themselves insisted on.

They're not, so they do.

Sticks and stones will break my bones, but words can never hurt me.

They can increase bond spreads. And since the BuBa has been the most poisonously opposed to doing anything meaningful about those (that is, unrestricted primary market operations)...

So the right-wing government of say the Netherlands are closeted Keynesians

No, the Dutch are almost as insane as the BuBa. But the Spanish , Italian and French governments are just barely smart enough to see that the only solution to this crisis is to print money. German hissy fits at every mention of this solution is not a helpful part of the European political scene.

"National accounting" has nothing to do with taxation levels.

But everything to do with the ability of taxation levels to affect the sovereign budget outcome in the context of a deleveraging private sector.

As Bofinger pointed put, you can't run a good state on the tax levels of the US or Ireland. That has nothing not with current account balances;

The quite clear implication of the table Mig quoted was that if just the countries running sovereign deficits in excess of the Grief and Stupidity Pact limit would institute German levels of taxation, those sovereign deficits would go away.

That implication violates a couple of accounting identities.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Aug 14th, 2011 at 08:08:48 AM EST
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