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Business Daily: Austerity versus Stimulus

28/06/2011

Austerity versus Stimulus

BBC World Service - Business Daily, Austerity versus Stimulus

Which brings your country out of a downturn better - spending or saving money?

As the Greeks struggle with austerity and the Americans with paying for stimulus, Lesley Curwen asks which of them has the right formula for economic success. Plus creating jobs the Texas way.

As fears grow over the perilous position of Greece, and President Obama wades into the battle over how to tackle America's huge deficit, is there economic evidence that austerity actually does the job it is  supposed to do - bring a sick economy back to healthy growth? 

Economists fiercely disagree over how effective it is to impose the sort of massive cuts seen in Greece and other countries. 

Some argue it is counter-productive, and can actually make the original deficit worse. Others say it is the only way to reduce the backlog of debt and interest payments and keep the confidence of the markets. 

Lesley Curwen is in Washington, DC to disucss the issues with Mark Weisbrot, co-director of the Washington based Center for Economic Policy and Research and John Makin, chief economist at the huge global hedge fund Caxton Associates, who is a fellow at the American Enterprise Institute. 

Plus, two years on from America's official recovery from recession, the BBC's North America correspondent Jonny Dymond has been investigating what makes Texas special.  'Look to Texas' say the conservatives, where jobs growth has been higher and unemployment lower than the rest of the US for years now. What's the Texan secret?

And The BBC's Lucy Williamson in Seoul looks at South Korean attitudes to food. The farmland of South Korea has been shrinking over the past 50 years, as its modern economy has grown and its cities have mushroomed. These days, it has to import half the grain it needs to feed people. Despite this reliance on imported food, and the concerns of some experts, many Koreans just don't see a problem. So should they?

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