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Unformatted text preview: quotes Paul Krugman, as he would call it; the pain caucus is in control. Many countries are now being apart of the caucus for different reasons, seeing austerity as a way to avoid the harsh fates, such as the one of Greece. In my opinion, I do agree there is a strong political element to the newfound parsimony. Officials have been calling for wage cuts and tax increases and it has been a harsh act to endure. Although it will be quite difficult to solve the mess left by predecessors, eventually leading to austerity once again. As further stimulus would be the obvious choice for the economy, Obama and his administration believed higher short-term deficits are a greater political risk than slower growth and higher unemployment. For growth to occur, harsh acts are given. Large economies need to run higher shortages in the short term to uphold growth and fix the gaps afterwards....
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- Spring '11