OECD is Latest Economic Bigwig to Question Austerity's "Loop of Doom"
By not increasing spending, 'we are breaking promises to young people and old people,' says OECD economist
Less than a week after the International Monetary Fund (IMF) expressed reservations about neoliberal policies like austerity, the Organization for Economic Co-operation and Development (OECD) is urging governments to increase spending in order to "make good on promises to current and future generations."
Not doing so, OECD chief economist Catherine Mann told Reuters, deprives youths of job opportunities and means the elderly will not get the healthcare and pension benefits they expect. "We are breaking promises to young people and old people," she said.
In its twice-yearly Global Economic Outlook, the 24-nation body said the world is stuck in a "low-growth trap" that will only get worse under status quo policies like quantitative easing.
Indeed, the OECD said "almost all countries have room to reallocate spending and taxation towards items that offer more support to growth" like investments in infrastucture as well as education.
"Governments, in other words, should stop obsessing about cutting their way back to financial health and consider growing their way out of the red instead," wrote the Guardian's economics editor Larry Elliot on Wednesday, who noted that a "wind of change is howling through the world's economic institutions."
He continued:
Words, however, come cheap. Just as the IMF's new thinking about the failings of neoliberalism is not always shared by the officials that give policy advice to countries in economic difficulties, so there is no obvious rush by OECD members to club together for a joint public investment programme. As Angel Gurria, the OECD's secretary general, put it: "They are talking about it but they are not doing it."
Things may need to get worse before the penny drops. If the OECD's gloomy analysis is right, that moment may not be far off.
Writing from a country where the "cruel screw of austerity" has turned for years, former Greek finance minister Yanis Varoufakis on Tuesday offered an on-the-ground perspective of how tax hikes and pension cuts have affected his country's population.
"Behind the grim numbers," he said in the New York Times op-ed, "an ugly reality looms, one that gets uglier by the day. Small businesses have been crushed by punitive taxes, and a wave of home foreclosures is on the horizon. Greece's hospitals are running out of basic necessities, while our universities cannot even afford to provide toilet paper in their restrooms. In Athens these days, only the soup kitchens are flourishing."
Noting that last week's meeting of the so-called Eurogroup--an informal body of eurozone finance ministers together with officials from the European Central Bank and the IMF-- dashed Greek hopes of debt relief, Varoufakis declared: "Reason demands an end to this loop of doom."
Urgent. It's never been this bad.
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission from the outset was simple. To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It’s never been this bad out there. And it’s never been this hard to keep us going. At the very moment Common Dreams is most needed and doing some of its best and most important work, the threats we face are intensifying. Right now, with just two days to go in our Spring Campaign, we're falling short of our make-or-break goal. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Can you make a gift right now to make sure Common Dreams not only survives but thrives? There is no backup plan or rainy day fund. There is only you. —Craig Brown, Co-founder |
Less than a week after the International Monetary Fund (IMF) expressed reservations about neoliberal policies like austerity, the Organization for Economic Co-operation and Development (OECD) is urging governments to increase spending in order to "make good on promises to current and future generations."
Not doing so, OECD chief economist Catherine Mann told Reuters, deprives youths of job opportunities and means the elderly will not get the healthcare and pension benefits they expect. "We are breaking promises to young people and old people," she said.
In its twice-yearly Global Economic Outlook, the 24-nation body said the world is stuck in a "low-growth trap" that will only get worse under status quo policies like quantitative easing.
Indeed, the OECD said "almost all countries have room to reallocate spending and taxation towards items that offer more support to growth" like investments in infrastucture as well as education.
"Governments, in other words, should stop obsessing about cutting their way back to financial health and consider growing their way out of the red instead," wrote the Guardian's economics editor Larry Elliot on Wednesday, who noted that a "wind of change is howling through the world's economic institutions."
He continued:
Words, however, come cheap. Just as the IMF's new thinking about the failings of neoliberalism is not always shared by the officials that give policy advice to countries in economic difficulties, so there is no obvious rush by OECD members to club together for a joint public investment programme. As Angel Gurria, the OECD's secretary general, put it: "They are talking about it but they are not doing it."
Things may need to get worse before the penny drops. If the OECD's gloomy analysis is right, that moment may not be far off.
Writing from a country where the "cruel screw of austerity" has turned for years, former Greek finance minister Yanis Varoufakis on Tuesday offered an on-the-ground perspective of how tax hikes and pension cuts have affected his country's population.
"Behind the grim numbers," he said in the New York Times op-ed, "an ugly reality looms, one that gets uglier by the day. Small businesses have been crushed by punitive taxes, and a wave of home foreclosures is on the horizon. Greece's hospitals are running out of basic necessities, while our universities cannot even afford to provide toilet paper in their restrooms. In Athens these days, only the soup kitchens are flourishing."
Noting that last week's meeting of the so-called Eurogroup--an informal body of eurozone finance ministers together with officials from the European Central Bank and the IMF-- dashed Greek hopes of debt relief, Varoufakis declared: "Reason demands an end to this loop of doom."
Less than a week after the International Monetary Fund (IMF) expressed reservations about neoliberal policies like austerity, the Organization for Economic Co-operation and Development (OECD) is urging governments to increase spending in order to "make good on promises to current and future generations."
Not doing so, OECD chief economist Catherine Mann told Reuters, deprives youths of job opportunities and means the elderly will not get the healthcare and pension benefits they expect. "We are breaking promises to young people and old people," she said.
In its twice-yearly Global Economic Outlook, the 24-nation body said the world is stuck in a "low-growth trap" that will only get worse under status quo policies like quantitative easing.
Indeed, the OECD said "almost all countries have room to reallocate spending and taxation towards items that offer more support to growth" like investments in infrastucture as well as education.
"Governments, in other words, should stop obsessing about cutting their way back to financial health and consider growing their way out of the red instead," wrote the Guardian's economics editor Larry Elliot on Wednesday, who noted that a "wind of change is howling through the world's economic institutions."
He continued:
Words, however, come cheap. Just as the IMF's new thinking about the failings of neoliberalism is not always shared by the officials that give policy advice to countries in economic difficulties, so there is no obvious rush by OECD members to club together for a joint public investment programme. As Angel Gurria, the OECD's secretary general, put it: "They are talking about it but they are not doing it."
Things may need to get worse before the penny drops. If the OECD's gloomy analysis is right, that moment may not be far off.
Writing from a country where the "cruel screw of austerity" has turned for years, former Greek finance minister Yanis Varoufakis on Tuesday offered an on-the-ground perspective of how tax hikes and pension cuts have affected his country's population.
"Behind the grim numbers," he said in the New York Times op-ed, "an ugly reality looms, one that gets uglier by the day. Small businesses have been crushed by punitive taxes, and a wave of home foreclosures is on the horizon. Greece's hospitals are running out of basic necessities, while our universities cannot even afford to provide toilet paper in their restrooms. In Athens these days, only the soup kitchens are flourishing."
Noting that last week's meeting of the so-called Eurogroup--an informal body of eurozone finance ministers together with officials from the European Central Bank and the IMF-- dashed Greek hopes of debt relief, Varoufakis declared: "Reason demands an end to this loop of doom."