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Uroboros posted:So I'm so super ignorant in this topic. Greece is heavily in debt and in a financial crisis while the US is deeply in debt but doesn't seem to be on the verge of economic collapse. Is this purely because of political power? The owners of Greece's debt are actually larger than their debtor while the U.S. has its debt spread amongst many lesser economic powers who would suffer majorly if the U.S. collapsed and thus have no interest in forcing the issue? As Hobologist said the problem is that they owe other people Euros and they can't print Euros like the U.S. could with dollars. They actually need to produce goods to pay back the debt but their economy stinks and austerity and crisis made it far worse. Of course other countries could forgive their debt or stop charging interest but they simply don't want too. They want their money back and the interest too.
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Jul 17, 2015 00:50
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Farmer Crack-rear end posted:The people who sincerely push austerity as necessary (instead of as a cynical ploy to get their money out or whatever) basically believe that the To avoid debt you do need to not spend too much and take in enough revenue. That's true everywhere all the time. This thread is horrible as far as people actually understanding what they're discussing.
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Jul 20, 2015 00:33
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KennyTheFish posted:Correct me if I am wrong, but most of the reason the household analogy for governments is stupid is because governments control the money supply. If they don't, as in the case with the euro, does the analogy hold? If it does, what does this mean for economics? If a government has borrowed too much money then it needs to save more money. It's that simple. The household analogy is useful there. The thing that's not simple is determining the best way for the government to save more money. Austerity is the direct route: spend less/save more. The problem with this, and one way the household analogy breaks down, is that there is a feedback effect where drastic changes in government spending cause problems due to disemployment and the initial disruption of the rapid change. When the government stops spending it may cause it to earn less in the future.
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Jul 20, 2015 01:02
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Pohl posted:Still waiting for a few examples where austerity worked well and everyone came out healthy and happy. C'mon, there has to be a few examples out there..?? Austerity in the sense of not spending too much money works well for every country that isn't in a debt crisis.
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Jul 20, 2015 01:41
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Nice graph. Friendly reminder: austerity means decreasing the deficit. For those who still don't get it but post in this thread.
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Jul 20, 2015 17:14
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Pohl posted:I'm willing to fully admit my take on Austerity is complicated. I think that simple definitions of austerity actually excuse it or defend it, much like fascism. It is a complicated issue and you can't just break it down into something like a 3 part definition; sorry if that doesn't satisfy you. Austerity is simple. You've gone off the rails trying to remake the definition to suit your own argument. Recognize what austerity is and then argue for why it won't work in this case. It's a much straighter path to the same place you're trying to go.
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Jul 20, 2015 20:06
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Trent posted:This definition is so overly simplistic and context-blind as to be worse than useless. It's like you showed up in a thread about racism in the American south and posted "by definition, friend of the family just means ignorant person. Actually that's part of my point. The definition of austerity is broad enough that it doesn't necesarily include context. The definition of a knife doesn't tell you how it's used. Whether a knife or hammer is used for good or bad is a seperate question. Here people are trying to pretend the definition of austerity is the equivalent of "murderous weapon" to make their arguments easier when it's actually a fairly routine policy that sometimes works fine. OwlFancier posted:It especially doesn't make sense because you can decrease the deficit by raising taxes or waiting for the economy to grow, which are independent of spending. Well correct but the context of that graph (spanning the recent recession) was primarily a combination of budget cuts and revenue increases, not growth. Which is consistent with the Krugman definition posted earlier.
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Jul 21, 2015 20:49
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Melted_Igloo posted:Raising taxes on the wealthy is not austerity, they will just find ways to invest their money elsewhere through loopholes and political corruption The thread is now supporting laffer.
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Jul 22, 2015 00:34
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Voyager I posted:By this definition, shifting towards a Scandinavian welfare state could be considered Austerity so long as the additional taxes on the wealthy outweighed the increased benefits to the poor. I continue to propose that the thread use the actual definition of the word austerity while discussing austerity. wikipedia posted:In economics, austerity is a set of policies with the aim of reducing government budget deficits. Austerity policies may include spending cuts, tax increases, or a mixture of both.
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Jul 22, 2015 00:55
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Trent posted:Definitions don't include context, like EVER. By definition. Yeah and? The context of austerity in the recent financial crisis applies to Greece, the UK, Iceland and a few other countries with varrying results. Do you agree or disagree. I take exception to the definition where people pretend austerity only means Greek failure. Also, to be clear, austerity isn't a reaction to recession. It's a reaction to debt.
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Jul 23, 2015 21:43
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Trent posted:And you made a stupid comment about a definition not including context. Austerity prior to the debt crisis would have prevented the debt crisis.
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Jul 24, 2015 04:12
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How do you think most countries avoid debt crisis?
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Jul 24, 2015 14:36
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Peel posted:This is incorrect, or if correct, irrelevant. The periphery governments (sans Greece) were fiscally responsible prior to the economic crisis. The debt crisis itself occured due to large increases in deficits caused by the recession together with private liabilities owed to northern European banks being taken onto the public balance sheet of southern European countries, occurring in a context where the countries are on an ersatz gold standard created by the Euro. Countries with post-WW2 monetary systems such as Japan, the UK or the US can swallow all those things with zero difficulty. Either we decide debt crisis is inevitable in the euro or we recognize that debt management can prevent it. V. Illych L. posted:uh austerity before the crisis would not have been austerity, as "austerity" commonly used refers to cutting spending in response to a downwards conjuncture in the economy, not countercyclical spending This is wrong. People will even refer to austerity in the U.S. to represent a state of mind despite the fact that the U.S. on the whole has done the opposite.
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Jul 25, 2015 01:02
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cheese posted:That depends on your definition of austerity. The governmental response to the 2008 recession was a stimulus package only a fraction of the size of the collapse of private sector demand, and the package was laden with almost worthless tax cuts. Ok so you're suggesting austerity might be anything less than full throttle stimulus (not entirely unreasonable) and I'm getting flack for applying austerity to anything other than a failed state.
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Jul 25, 2015 16:21
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Why is this E/N?
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Jul 26, 2015 19:36
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