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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Trichet: Eurozone can’t spend any more

Posted by WARREN MOSLER on June 22nd, 2009


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(email exchange)

>   On Mon, Jun 22, 2009 at 4:32 AM, wrote:
>   
>   ECB President Trichet has warned that governments have no more room
>   for taking on more debt, and should now look to start bringing down
>   budget deficits. “There is a moment where you can’t spend anymore and
>   you can’t accumulate any more debt. I think we are at that moment”.
>   

Similar to the Obama statement that the US has ‘run out of money.’

The difference is that under current institutional constraints Trichet is, unfortunately, probably right.

They are stuck waiting around for their own automatic stabilizers to function, and for exports to improve.

And hope the markets don’t test their banking system deposit guarantees and national government funding abilities.


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2 Responses to “Trichet: Eurozone can’t spend any more”

  1. Constraints Says:

    Why can’t they just change whatever institutional constraints they want and zoom the printing presses up to warp speed? Who will stop them? The same forces that stopped Obama from doing what his administration has wanted to do in the USA?

    Reply

  2. warren mosler Says:

    the political forces like the treaty the way it is

    Reply

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