According to Paul Krugman (the Nobel Prize in Economics 2008 winner) we should not underestimate our ongoing crisis. Using his words "there were only two eras in economic history that were widely described
as “depressions” at the time: the years of deflation and instability
that followed the Panic of 1873 and the years of mass unemployment that
followed the financial crisis of 1929-31."
In his column for the New York Times he writes that we are on the edge of a third depression - "this third depression will be primarily a failure of policy." Krugman blames politicians for "raising taxes and cutting spending (which) will actually expand the economy, by improving business confidence". He concludes that instead of spending in the midst of a crisis, long-term fiscal responsibility is what should really matter.
I wouldn't see the situation so bleak but of course I'm not an economist to judge the situation properly. Any comments?

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We must not leave the economy to economists. Not one has seen the European mess coming, not one!
Only yesterday 58 out of 58 polled economists got the Philadelphia Fed Index with a consensus figure of +7 completely wrong. It was -7.
I see this happening every day.
The problem is they all use linear projection models that are designed to fail when circumstances change dramatically, as they do every day in Europe.
Only a few weeks ago, the UK societies of economists and accountants said UK public net debt was not the official figure of STG 900 billion but closer to 2 Trillion. Crapshoot: The next day the Office of National Statistics came out with a figure of 4 Trillion.
you can find this and more criticism of Keynesian economists here
I believe it's just one-sighted (=US) view - regarding that article. Would you suggest to use rather a gold standard instead of fixed current rates worldwide though?
How does sound president's Klaus words: "The very unpleasant, day by day deeper economic crisis should be accepted as a standard economic phenomenon, as an unavoidable consequence and hence a “just” price we have to pay for the long-term playing with the market by the politicians. Their attempts to blame the market, instead of themselves, are unacceptable and should be resolutely rejected...The best thing to do right now would be to temporarily weaken, if not permanently repeal, various labour, environmental, social, health and other “standards”, because they block human activity more than anything else. In the moment of the fall of communism, almost 20 years ago, I did not expect to experience such a degree of government intervention into my own life as I face now..."
(quated from Foreign Policy Lecture Series, Foreign Policy France, Ledoyen Restaurant, Paris, 11 February 2009)
In this sense I would agree...
Calls for and against austerity come to our desks -desktops- every day, indeed. I'm more concerned, though, with something Veronika has mentioned: most of the economic info we get in the EU has US origin. Bloomberg and Reuters provide more than 2/3 of all financial news in circulation! -I found that out myself while writing this back in May '10 (it's a google translation, apologies, but one gets the idea). I'd really wish European financial journalists could talk more to each other: sometimes it's easier to get data about Portugal -for instance- from the Wall Street Journal than from Portuguese sources themselves! 


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