The economic policy dilemma

An article in The Guardian calls upon the European Central Bank to drop its commitment to austerity and instead go for quantitative easing and inflation.

The problem is that either way some people, different people, perhaps even all of us  are going to suffer.

Austerity means some people are going to lose their jobs.  Inflation means that people with savings are going to see their savings eroded and possibly reduced to nothing.  Quantitative easing is intended to provide stimulus to economic activity.  However, if it is correct that the root cause of current economic problems is resource depletion, then this will only use even more resources and bring forward an even worse economic collapse.

I figure that as well as resource depletion we also have to deal with some serious problems in the way in which money is created.  A suggestion as to how to deal with these problems is given in the essay “LETS go to market: dealing with the economic crisis” on this weblog.

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