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LeoMarr posted:So back to austerity. why did austerity work for Germany, is it because most of their loans were forgiven and thus even though they cut government spending they didnt have to pay all profits to the loan collectors? Germany is a good case study because it provides a nice control with the former DDR. Austerity policies in the former DDR create lots of problems with unemployment, factories closing and all sorts of awful poo poo. Austerity in the well-to-do industrialized areas in Western Germany has resulted in less government spending and increased investor confidence so a few debts get forgiven and others get restructured. While I think there are better approaches, if you can afford it, austerity is a viable response to loss of investor confidence. If you have a lot of money and are spending too much money, it makes sense to just spend less money. On the other hand, if you can't afford it, austerity makes things much, much worse.
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Jul 16, 2015 02:56
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"The International Bankers that decide a country's credit are wealthy and austerity makes rich people, especially International Bankers, happy." As an added bonus, people frustrated by the machinations of International Bankers tend to vote hard right, so it further shores up a country's conservative cred.
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Jul 16, 2015 05:21
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trucutru posted:Of course anything doesn't have to be a certain way for something else to be other way. That's not what being a "net exporter" means. And it doesn't matter anyway, since American debt (both national and consumer) is what is driving the world's economic engine right now.
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Jul 16, 2015 15:32
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