More austerity, more debt

How is that austerity working for you? According to a recent policy brief by UN-DESA, not so well. The authors (Oliver Paddison and Rob Vos) say that:

"Available evidence suggests that fi scal austerity is not helping restore economic growth or debt sustainability; countries that made the biggest spending cuts to reduce fiscal deficits have seen their debt-to-GDP ratios rise even further (see figure)."

The graph shows that higher primary surpluses (difference between revenue and spending, excluding financial payments) are correlated with higher level of public debt. The reason is that austerity reduces the level of activity and depresses revenues as you would expect according to Keynesian principles.

I think increasingly we have an analogy with evolution and creationism in the debate about the effects of austerity. Logic and evidence are clearly on one side, but belief, well that goes in any direction. The problem is that beliefs, ideology, and vested interests have an impact on policy.

A leader for the ILO

Vijay Prashad writes on the very important election for the head of the International Labour Organization, and the need to support Jomo K.S. a progressive economist, in particular in the middle of the current global crisis. He says:

On May 28, a select group of delegates will enter a room in the International Labour Organization (ILO) in Geneva to elect the body's next Director-General. Nine candidates are in line for the post. The ILO's byzantine process revolves around a tripartite structure, with the employers (the International Organisation of Employers), the workers (largely the International Trade Union Confederation, ITUC) and the governments sharing the task of selecting the next Director.

Read the rest here.

Recovery with a human face

There have been many fora for discussions about the crisis, and its consequences on the more vulnerable around the globe. The electronic debate moderated by United Nations was among the more interesting. Topics ranged from the impacts of the crisis to policy responses and alternative options for socio-economic recovery. Now a summary of the debates is avaliable here:

A Recovery with a Human Face? Summary of a UN e-discussion

A more thorough analysis of the issues debated can be found in the recent publication A Recovery for All: Rethinking Socio-Economic Policies for Children and Poor Households, which can be downloaded for free here.

Thanks go to Isabel Ortiz for sharing the information, and for her commitment to the whole project.