'..the pace of reform is somewhere between glacial (Italy and Spain) and non-existent (Greece).'<blockquote>'..Unfortunately, there have been very few attempts at genuine economic reform in the euro area, the type of reform that would create a glimmer of hope that growth and competitiveness could be restored in the debtor countries. Some, like e.g. Portugal, have proven more adept at introducing reform than the others, but overall the pace of reform is somewhere between glacial (Italy and Spain) and non-existent (Greece). In the meantime, their TARGET-2 liabilities keep climbing into the blue yonder. It is an unsustainable construct and therefore it won't be sustained.
..
Like all good Keynesians, Rosengren believes that the problems can be solved if we somehow manage to 'consume ourselves back to prosperity'. Spending, not production, is the chief problem in this view. Production is assumed to take care of itself, if only sufficient 'aggregate demand' were to surface. This is based on a very unsophisticated view of the economy as a kind of circular flow system (one person's spending is another person's income and so forth) – the complex capital structure and its inter-temporal coordination is ignored entirely. This is a bit like saying that someone with half a flask of water lost in the middle of the Sahara can improve his chances of survival by drinking as much of his remaining water as possible. Someone will then, as if by magic, provide more of it, seeing that the demand for water has evidently increased.
In reality, an increase in consumption would make the economy even more imbalanced than it already is due to the Fed's ministrations hitherto.'
- Acting Man,
The Global Economy – Misguided Decoupling Theories and the Difference to 2008, June 1, 2012</blockquote>
Context<blockquote>
Mises - Money and Credit - '..the recession was a problem of under-saving, and over-consumption..'</blockquote>