The Cost of a Stimulus

Snowflake5 analyses the Q1 GDP numbers from Eurostat.

Germany belatedly started to take action earlier this year. But the delay has been costly – some economists reckon that the cost to fix things will be more than the cost of re-unification. The real cost of recessions is the drop in tax revenue – and the longer and deeper the recession is, the worse that cost is. Germany has now admitted that it will experience it’s biggest budget deficit since WW2. It’s actually cheaper to go for a stimulus early to mitigate the recession and ensure it is short-lived than to let it run and run. Tories like George Osborne cheered Germany to the rafters when they were making their idiotic comments last Sept about “crass Keynesianism”. But they are strangely silent now.

 

Well said.

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