Contrasting Economic Responses: US vs. EU

Europe and the US are both recovering from the same problem – COVID and the inflation that followed. But last week the Fed in the US dropped interest rates by half a percent, with markets expecting a soft-landing for the US economy. Europe, meanwhile, is struggling, with Germany’s economy heading backwards for more than a year. So, when the big difference when both economies are coming from the same place? Steve Keen tells Phil Dobbie that the US would be struggling just as much if it restricted itself to the Maastricht rules on fiscal policy and government debt. Instead, Joe Biden spent big on the Inflation Reduction Act.

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