Those of us of any age whatsoever tend to think of the finances of our nation as similar to the finances of our families: if you're running out of money, stop spending so much.
This seems to be the mindset of the Europeans right now; they are all working on austerity plans. The entire EU, though some members more than others, have zipped their wallets shut tightly. The Chancellor of the Exchequer, in London, is reining in, as is the Chancellor of Germany, and the Nordic countries have frozen their budgets. But the Latin nations in the south are not so sure about this deal. Greece and Italy have just had an election and the people, fed up now with austerity, threw out their tightwad governments which, they claimed, were listening too much to the tightwad Germans who were whining at being stuck with the bill after the southerners had dined sumptuously.
Here in America, we can't seem to make up our minds. The Democrats want to spend while the Republicans want to cut the budget. Thus we come to our Frequently Unanswered Question: Is it better for the government to quit spending so much or is it better to have them prime the pump once again with a few trillion which we don't have but which we can print just as fast as those presses will run, and that's pretty fast.
Paul Krugman, a Nobel laureate for Economics, says we should spend more. On the other hand President Obama got a Nobel prize for peace before he'd hardly got down to work. So who knows about this Nobel business? Anyway, Krugman claims that the national economy is not like your family's budget, and he explains it pretty well this way: unlike a family, for a nation of people, one person's spending is another person's income; as a consequence we can keep printing money until inflation starts to go up, which it hasn't yet, much. Still, the Europeans have economists too, and Willi bets at least one of them have a Nobel prize, probably a flock of them do. Yet they seem to come to the opposite conclusion: spend less!
It seems to Willi incredible that economists who study this matter cannot come to a consensus. Once again, Harry Truman was right on point when he said something like this: Give me a one-armed economist any time, that way he can't say, "On the one hand…"
We should by this time have enough computers in the cloud to simulate just about anything and come up with the answer. We have an IBM computer, named Watson, which can beat Ken Jennings at Jeopardy, and one named Deep Blue which can make grandmaster chess players quiver. There is a helluva rig over there in Europe on the border of France and Switzerland called the Large Hadron Collider which has analyzed some billion trillion particle collisions in order to find a boson named Higgs. They think they've spotted him, but now they think he might have his whole family with him—though maybe they're just angling for some more money. The point is these people can do a lot of shit. But they can't seem to come up with the answer to a simple yes/no question: spend more/spend less. Why is this so hard?
Willi doesn't know.