It seems that austerity does not work, as seen from following links: http://www.ft.com/cms/s/0/33f460c6-946b-11e1-bb0d-00144feab49a.html#axzz1tjgexHLn http://www.cbsnews.com/8301-500395_162-57426135/record-eu-jobless-rate-boosts-anti-austerity-push/ http://www.huffingtonpost.com/mark-weisbrot/eurozone-austerity-faces-_b_1464849.html
It seems that austerity does not work, as seen from following links: http://www.ft.com/cms/s/0/33f460c6-946b-11e1-bb0d-00144feab49a.html#axzz1tjgexHLn http://www.cbsnews.com/8301-500395_162-57426135/record-eu-jobless-rate-boosts-anti-austerity-push/ http://www.huffingtonpost.com/mark-weisbrot/eurozone-austerity-faces-_b_1464849.html
It's not a matter of whether or not "austerity works"... It's more a matter of "austerity as a necessity to correct prior errors". Austerity... nobody likes to have their bennies taken away or reduced. The problem is in correcting prior excessive largess. I say, "Cut off every tit-sucking parasite"... because as a society we are not going to allow people to starve or freeze to death.... social support should still be only "3 squares and a cot". I you want better than that in your life, GET A FARKIN' JOB!! (The world does not benefit from parasites... The world doesn't owe you a living just because you were born in the USA... not YOU nor anybody else!)
When you get govt cheese for free... and then next year get "only" 85% of the cheese but now have to pay .05, of course that feels like austerity. You're a free rider. Still. Yet people with broad shoulders who work whatever life throws at them have to pay 5$ for it. Or go without. Interesting disconnect. Yes we can! There is plenty of tax $ for legit causes. Because you're losing out on 3 months of vacation and have to work til 65 is not one. Time to cue the Fram Filter Man commercial.
Austerity never was a policy; it was a result; it is the result of insolvency; it never could meet its faux policy objectives becuase the objectives were based on a false premise. EU has a debt stabelization law based on a 3% GDP annual deficit limit. The false premise is that a GDP metric is a growth metric that can be used to rationalise a government debt level. It's nonsense because the GDP is actually a spending metric that is highly dependent on Government Spending; it does not really measure growth in the first place. GDP = (C) Consumption Spending + (G) Government Spending + (I) Investment Spending + Net of Imports/Exports). The only thing that has anything to do with growth in this equation is the "I" part. Think of the stupidy of 'austerity' as a policy to reduce the ratio of Debt/GDP. They actually proposed to reduce government spending in order to reduce the ratio. Logic should have informed them that if they reduced the numerator by the same amount as the denominator then they were not goiing to reduce the ratio. They really should be trying to figure out what 'growth' really is. They should be making the "I" grow. But more likely they will just increase the 'G' and say that is growth. A better metric for growth would be "I"/GDP. This is an intentional deciet be elites trying to preserve a power structue status quo. Doesn't look like its going to last.
Honest question: if USA has so much debt and has to print so much funny money, why is treasury interest rate so low?
"This is an intentional deciet be elites trying to preserve a power structue status quo. Doesn't look like its going to last." Will be interesting to see just how long these bozos last as the house of cards they've been propping up with a delusional bowl of porridge for everyone evaporates in front of their eyes.
these "bozos" are a lot smarter than the avg. person. they will reinvent themselves to handle whatever circumstances exist.
Ed, what do think of my idea of massive taxcuts as a stimulus. Sure, it would cause a revenue shortfall but that can be made up later. Especially eliminating the taxes which hurt the working poor, like social security, medicare and fuel tax. Corps have plenty of money to invest, but no customers. Start at the bottom and stimulate consumption and investment will follow.
baggerlord, U.S. Treasuries are low because there is no better place to park an oversupply of big global money. Interest rates are low becuase there is a huge global demand for U.S. Treasuries as a liquid place for excess funds. In the context of Global deleveraging there is a contraction of private credit; stated differently, in the aggregate there is weak demand for debt, for private loans, from qualified borrowers. So, there is a massive amount of excess funds that have to be put somewhere and at the same time there are serious questions about the solvency of major banks and many countries. Big money is looking for a holding place of liquidity...best choice for now appears to be the U.S. 10 Year...and to a lesser extent the German Bund and some other less liquid currecies of soveriengs with good balance sheets and commodity resources...Australia, Canada, Singapor...but only the U.S. Treasury market has the requisite liquidity for really big money. U.S. 10 year Treasury is the money of the world. There is no real 'money' printing if the Fed balance sheet expands its assets in debt securities and the dollar liability paid to the banks simply returns to the Fed balance sheet as excess reserves. If the reserves are not being used to form private credit then no real 'money' is being created. In terms of the quantity theory there is no money creation...reserves of $1 dollar have the same impact as reserves of $1T dollars. Oldtime, you scheme of 'Tax reduction stimulus' is no different than government targeted spending stimulus in that you are basing your recommendation on Keynesian demand management theory. The problem is not with consumption demand; the problem is with the lack of investment in maintaining or creating real assets that have future income. The fact that successful multi national corporations have excess funds is not becuase they don't have customers...they go that money becuase they do have customers...the problem is that as they look at the government fiscal proposals and problems going forward and the likely impacts on thier ability to possess future income. They have decided it is better to hold reserves than to invest in assets where their ability to possess the future income from those assets is uncertain. Reducing taxes on poor people does nothing to promote growth (which should be understood as the increase in the income from aggregate assets). All the subsidies for the poor, all consumption and all government spending must ultimately come from the surplus cash flow from aggregate assets....if you don't invest in maintaining and creating those assets you have eventually have austerity forced on you...becuase your income declines. Tax reduction as policy must be focused on the costs and incentives of capital formation applied to the creation and maintenance of assets. Other taxes need to be reconciled against the legitimate need for revenue to fund an appropriately sized government pursuing circuscribed and legitimate government objectives.