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Governments that deliberately undermine their economies

I get many E-mails from readers who are confused about stocks and flows. At least that is my diagnosis because from the questions that I get asked it is apparent that there is a deep misunderstanding of what a budget deficit actually is and how it is different from the stock of outstanding public debt. This is an important issue and bears on how many seek to comprehend the latest Eurostat – Flash National Accounts data – for the third quarter 2012. The data is now signalling a further descent into recession in the Eurozone and with further cutbacks being imposed on various nations, already mired in what should be called Depression, the outlook for 2013 is worse. This is a case of governments deliberately undermining their economies. The strategies in place cannot work. All they will do is add more workers to the millions that have already been forced into unemployment by this policy folly. I view the policies being imposed in Europe and the UK, for example, as criminal acts.

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