To the author:
So if the Latvian govt. had done nothing, emigration would not have increased, and the economic crisis would have disappeared (magically)?
My point is that you ignore the root of the problem. Neither your article, nor your comments here acknowledge that there was an economic crash that initiated problems that had to be addressed and if nothing had been done, it is likely that emigration and other problems would have kicked in even w.out austerity.
From your last post, you argue that a stimulus package would have been the solution.
Isn’t this a similar argument that we have been having in the U.S.? Would Republican austerity save the day or is further stimulus the answer. If everyone knew that one policy would work and the other would result hardship, wouldn’t action have already been taken? There is lively debate. There is uncertainty.
Krugman is pro-stimulus. Other economists are not.
What I find disturbing about your position is that the underlying problem that led to the austerity program has NO role in any of the problems. It is SOLELY the fact that the austerity program was imposed. I can see and admit that cutting wages, jobs, etc. likely to to more emigration, reduced spending which in turn stalled the economy. This argument makes sense. But to say that austerity alone- without the initial impetus of the economic crisis is the sole cause of increased emigration defies logic. The country was crashing - but everyone would have stayed put in Latvia.
I do not see how a scholar can separate the effects of the cause and the effects of the program with such simplicity. Cause resulted in no problems - program produced every problem. Then I guess NO stimulus package would have been necessary or anything else.
Re Western Europe - So France just changed their pension program for the fun of it - essentially to upset the French. The program was sustainable as is? The govt did this even though some other solution that wouldn’t have required changes in the age of retirement would have solved the problem. The politicians didn’t want to be reelected. Why, oh why would they do something this unpopular - when all was good?