At the risk of starting the weekend on the wrong note, I’d urge Coffee Housers to read Ken Rogoff’s piece on what’s next for the global economy. Rogoff, a Harvard professor and former chief economist of the IMF who has been advising the Tories, accuses western leaders of lazily concluding that the system that crashed was better than any alternative. He worries that this will have disastrous consequences:
Rogoff might be being too pessimistic, but it does seem that the far-reaching reform that everyone agreed on the need for in the immediate aftermath of Lehman’s collapse has not materialised. Too many leaders want to just re-inflate the old bubbles.“Within a few years, western governments will have to sharply raise taxes, inflate, partially default, or some combination of all three. As painful as it may seem, it would be far better to start bringing fundamentals in line now.”
Hat Tip: Greg Mankiw
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