Austerity Lecture

https://www.youtube.com/watch?v=JQuHSQXxsjM

Speaker: Mark Blyth, Professor at Brown University. Author of Great Transformations. Ph.D from Columbia in Economics.

Refers to himself as a great example of welfare empowered social mobility - having gone from orphan to Ivy League professor.

Asset protection + tax cuts + 2 wars = 61% debt/gdp by 2006.

A shortage of T-bills (shrinking debt in early 2000s and increased demand from China) produced a run on the repo market - using AAA mortgages as collateral for repo collateral. This cascaded to a liquidity crunch.

There was no large growth in public spending, the only major growth was asset protection. He argues "We are not in much of a mess" - because we have not been cutting. Our growth projections are looking ok, Britian looks worse and Europe looks bad. Greece had done more damage to it's economy that Germany did to it's own in WWII, in the same period of time.

Debt as %GDP

• USA : 105%
• UK  : 90%
• Spain : 70%
• Japan : 140%
• Italy : 120%
• Ireland : 100%
• Greece : 160%
• Germany : 70%
• France : 80%
• Canada : 80%