LETTER OF THE DAY - Austerity can't work
THE EDITOR, Sir:
Jamaica need only look at what happened to the economy of Greece to have a glimpse of what is in store for our economy. An austerity programme was forced on the Greek government by the European Union, led by Germany and the International Monetary Fund (IMF) during the recent recession, which eventually brought Greece to its economic knees.
The proven process for economic recovery by the renowned economist John Maynard Keynes was ignored. Instead of increasing government spending to stimulate demand and growth and reduce unemployment, the Greek government decided on an increase in taxes and a cut in public-sector employment, thus pushing up unemployment, stifling growth, and watching debt balloon to more than $300 billion, which brought the Greek economy to the brink of collapse.
The current IMF austerity programme being followed by the Jamaican Government will not solve our anaemic growth in the near future. Without a short-term increase in government spending and near-term private-sector investment, unemployment will continue to rise to critical levels and growth will sputter along at two per cent indefinitely. Our austerity programme is a recipe for economic collapse.
R. OSCAR LOFTERS