Tag Archives: fake austerity

Link: “Sipilänomics, or Finland’s fake austerity”

If you are interested in reading about what is happening in Finland right now, read this blog post. Most of it is very useful but I disagree with the notion of ‘not trying to balance the budget.’/”not really trying austerity”. The author does not apparently realize that the great rise in government debt comes from automatic stabilizers, i.e. as unemployment rises, so also government spending on unemployment benefits rises. Finland does have union managed unemployment funds, but these are mostly funded by the state (see here for an overview by the managing institution of unemployment funds).

So, this post is useful for the political economy of government spending and rearranging employers’ contributions etc (the redistribution of income issue) but don’t put too much weight on the ‘fake austerity’ dimension.