How's that austerity working out for you?

Discussion in 'Economics' started by olias, May 12, 2011.

  1. olias


    "As the budget debate in America goes from “mild cuts” to “severe cuts,” it’s worth looking at parliamentary democracies where such so-called “austerity” budgets have already been instituted. Uh, not so good, it turns out. Ireland’s economy needs another bailout. Portugal needs an EU bailout. Why does Portugal need a bailout? Their government failed to create an “austerity” budget.

    Wait a minute… I thought they already had an “austerity” budget. Indeed, they did. And yet, their economy continues to putter along, further damaging its bonds and convincing bondholders that they will not be able to pay back their loans.

    Just so we’re clear, if you’re in a recession, and you cut spending while drastically raising taxes to close your budget gap, for some reason, your economy doesn’t turn around. Imagine that!

    “Austerity” measures (which sounds so much better than “harsh, restrictive” measures), although they ostensibly calm bond-holders, don’t appear to do very much. Take a look at the countries with the most drastic cuts — the UK and Germany. Although they are recovering, they are not nearly as robust as the stimulus-only American economy. The tight-fisted European Central Bank refuses to loosen the monetary strings, particularly with the Eurozone’s various economies in such different states of recovery.

    And instead of sitting back and realizing that “austerity” only lengthened the crisis, the financial elite have decided that more austerity is needed! Cut more! More austerity! Cinch your belts!

    Contrast the quarter-by-quarter German recovery to the American recovery. And Germany’s the strongest economy in Europe!

    Yes, there are nuances to growth, particularly with the no-money-for-anyone credit policy in the ECB. Still, as a general rule, stimulus spending grows GDP; austerity spending restricts it.

    Now, Paul Ryan is pitching the same program of entitlement cuts that has 0.5% growth per quarter in Germany, and everyone’s buying. It’s like I’m taking crazy pills.

    Oh, you’re bleeding? I know what your economy needs: another bleeding! The “austere” budget is just shorthand for sadism. "
  2. “austere” budget is just shorthand for sadism. "

    Only because you champion the very cancer that is destroying Amerika. People like you, whom I doubt pay much in Taxes, want the Nanny state to continue to drain the Producers.

    People like you, Parasites, are about as productive as a dead weight.

    People like you and the Parasites you follow should all buy a one way ticket to Venezuela.
  3. TGregg


    One way or another we will eventually be on an austerity program in the US. Dolts like Krugman notwithstanding, we cannot continue to increase our debt. Other associated libtards notwithstanding, we will not be able to raise taxes enough to fund government spending at these levels. The longer it takes to get started, the worse it will be.

    These are the hard facts. The longer we try to sweep them under the rug, the bigger the pile gets and the harder it will be when it all blows up.