Superb Economist article about writing about Poland

What would you have done instead of running up a budget deficit?

*damn gov*

When your incomes are getting smaller then what you do ? Spend more ?

Never heard of spending your way out of a recession? It's a widely accepted theory, and history is littered with examples where it's worked and hasn't worked.

Likewise, cutting spending is fine and well - but look at the pain suffered by Latvia, Ukraine and Greece - I don't think anyone particularly wants this for Poland. Would the SLD or PiS really have done anything else but increase spending anyway?

The government is taking a gamble, this much is certain - but as I understand it, Poland is constitutionally obliged to cut spending once the deficit reaches a certain point anyway - so we won't see financial meltdown here because they'll be forced to act - unlike in other countries where they were allowed to run up massive debts without any balance.

Let's not forget that the very same government here managed to virtually avoid spending money on bailouts - unlike the vast majority of Western governments.

Never heard of spending your way out of a recession?

Public works, like building highways etc - yes but not just increasing spending on social programs.

Do you have one good example where a country consumed its way out of recession?

It's not sustainable. There is no free lunch. If you bought a benz on an opel salary, one day it's going to be taken away from you.

The interesting thing to see is what is the actual deficit. EU has some strange rules on what is considered a liability. Greece was thought to be in good shape due to how EU accounting works. Once you pull the curtain back, things look a lot different...Hopefully Poland is being conservative with their numbers...

It's because the countries in which the parent banks were operating had already done all the bailing out...

Didn't Roosevelt's New Deal work for America? I'm not so great with American history, but I thought that it was a great example of where it can work - provided it's backed up with sound financial management.

I think at least in the Polish case, they're gambling on the fact that Poland is gaining a reputation for being stable and sensible when it comes to business - which should increase investment and thus provide the revenue to sort out the deficit in the coming years. I'm no economist, so I can't really say if it's a sensible move or not. Right now, the gamble seems to be working. Tusk's policy of non-intervention with the zloty did no harm either in terms of attracting foreign investment.

But no, look at the major banks in Poland - only BZWBK's owners have had a bailout

Totally anarchistic country.

This thread is more about Poland, not Greece.

That's what the article got right...
You have an government which is everywhere in Europe accepted and respected (and not laughed about or treated with rolling eyes behind their backs as before), who presides over a progressing, stabilizing economy who get's the positive attention of many experts now and all you have to say about him is "a german puppet" who "sells Poland down the river"!

...this article is spot on!

Please tell me how you think devaluation is managed and to what extent certain players have control over that.

There's no gold to steal from under buildings here though is there? ;) :)

Then let them plunge headlong into their downfall.