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The real problem is that the stimulus was withdrawn and then reversed in 2010.

Only now are they starting to make noises about the need to have "jobs-friendly growth and growth-friendly fiscal consolidation". The "growth-friendly fiscal consolidation" is akin to "circle-friendly squaring".

So we're still withholding the necessary stimulus because, you know, 0.1% growth still destroys jobs and physical capital. So the criteria for fiscal stimulus should not be that growth is negative but that jobs are being destroyed.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sat Feb 18th, 2012 at 01:37:37 PM EST
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