In his latest column, the FT’s Martin Wolf spanks historian Niall Ferguson for his recent column equating Greece and the U.S. Here is the money ‘graph from Wolf’s latest:
If these governments had decided to balance their budgets [in 2009/2010], as [Niall Ferguson and] many conservatives demand, two possible outcomes can be envisaged: the plausible one is that we would now be in the Great Depression redux; the fanciful one is that, despite huge increases in taxation or vast cuts in spending, the private sector would have borrowed and spent as if no crisis at all had happened. In other words, a massive fiscal tightening would actually expand the economy. This is to believe in magic.