Austerity is not a remedy for a broken economy

Most economists believe austerity is the opposite from what is needed for a depressed economy.

The banks that caused the global financial crisis in 2008 were the only ones to be bailed out and are stronger than ever.

This has all been done on the backs of the ordinary citizens who appear to have no voice in any of this. Policies of austerity doom any economy to destruction.

Austerity does not heal an economy. If everyone is living in poverty how can you grow an economy. If companies have no consumers to buy their goods and services, tax revenues slump and the economy goes into a downward spiral.

Why not agree a sustainable repayment linked to an improving GDP together with a debt writedown? What is going on is blackmail.

Major debts are only solved by deep write-downs. The longer it takes to secure a writedown, the bigger the necessary write-down will be.

Nobody understands that better than the Germans.They benefited from a write-down deal in 1953 that underpinned Germany’s post war economic miracle.

Twenty years earlier, Germany defaulted on its debts from World War I after a bout of hyperinflation and economic depression that helped Hitler to power.

We all know the disastrous upshot of that period was like for humanity.

Michael O’Sullivan

Cahermore

Beara

Co Cork