How does austerity work

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WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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Can someone explain to me how Austerity works in economics. I understand the concept but not the implemetation and how it actually saves an economy

# ¿ Jul 15, 2015 23:02

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# ¿ May 8, 2024 09:52

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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Caros posted:

It doesn't. Hth.

In all seriousness, it just doesn't. Every place austerity was tried post recession recovered more slowly than places that had neutral of stimulus policies. Austerity in the face of a recession involves putting a lot of people out of their jobs in the middle of an unemployment crisis to somehow fix the Economy. It is stupid.

Okay but whats the end goal, How is it Supposed to fix the economy if it works? I knoe it doesnt, but I want to know what the people behind austerity claim to know.

# ¿ Jul 15, 2015 23:10

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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but wont the country be in perpetual debt if they are following austerity

# ¿ Jul 15, 2015 23:19

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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could austeriry work if they cut some spending but left other spending unchanged or larger

# ¿ Jul 15, 2015 23:27

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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so the real point of austerity is to cut the loaners lossess by recovering what they can in the short run and giving themselves time to pull out

# ¿ Jul 15, 2015 23:39

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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so austerity doesnt work and its obvious

so why are they signing agreements to continue austerity for longer if it obviously wont work.

# ¿ Jul 16, 2015 00:18

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Lumberjack Bonanza posted:

People make bad decisions when they don't have any easy options.

why didnt eu just invade greece and force them to pay their debts off at gunpoint, seems easier than waiting 3 years to just give them money again

# ¿ Jul 16, 2015 00:40

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Ddraig posted:

There are easy solutions, unfortunately for all involved these are antithetical to the idea of capitalism as a whole, so better to starve the beast until optimal conditions for capitalism are re-established so hopefully they won't have to deal with this problem again in their lifetime.

i dont think this is going to work

# ¿ Jul 16, 2015 00:41

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So Greece is hosed unless they just default on everything and turn into a fascist pariah state basically

# ¿ Jul 16, 2015 00:43

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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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?

# ¿ Jul 16, 2015 00:54

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so hypothetically, if greece collapses what happens. Do the loans stay there if another entity takes over the country or are they magically forgiven

# ¿ Jul 16, 2015 01:12

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ewiley posted:

Everything I've heard short term is 'privatization' which means a fire-sale of Greek government property to whoever will pay for it. This will obviously gently caress the Greeks long term, but at least some rich guy from Dubai can build his summer home on his very own Greek island.

So the way to fix the debt is to sell off everything the government has, which will pay off the debt but leave the country in financial ruin after the debt is paid. So they take more loans out to build up their assets and the cycle countinues?

# ¿ Jul 16, 2015 01:31

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ductonius posted:

Germany chopping $30 billion a year out of a budget of $1.6 trillion is poo poo all. It would be like asking the Greek government to cut $3 billion. But they're not. Interest on Greek debt was 20 billion Euro in 2014. That's like Germany having to cut $300 Billion per year which would cut 0.75% out of their GDP straight off the top, not counting secondary effects.

Germany's real foray into capital-A austerity was in the 1920s and it precipitated the rise of a particular mustached Austrian man you may have heard of.

so Greece is going to fall into a fascist pariah state because the last time Austerity got this bad hitler came to power. That makes sense with the riots that are going on right now

# ¿ Jul 16, 2015 01:47

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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Do you guys think Putin would send Greek humanitarian aid? Preferrably in the form of T-80s, Grazni rocket platforms and AK47s

# ¿ Jul 16, 2015 01:59

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Veskit posted:

I think we forgot to actually define what we're talking about when we say if austerity does or doesn't work. It does work extremely well if you're rich because it disproportionately affects you depending on how austere a society chooses to be. Also austerity works well for maintaining a stable currency in that it's MUCH easier to regulate how much inflation your economy is going to have when you have control of the press and there is little to no spending that needs to be done.

If that's what you value then yes, austerity works. You can make the decision of whether or not you're an rear end in a top hat though.

Germany saves money like loving crazy and does very little spending. If you look at where the banks are in Europe that matter (hint, germany and switzerland) you'll find that not only does the government save massive amounts of money, the people do also! Because of that their spending is more regulated through and through. Plus germany is special cause it can produce itself through anything. At the end of the day austerity works for Germany because they're austere people.

so Austerity works if people are austere in a sense. But greek people still live in the city state mindset and dont work towards a common goal?

# ¿ Jul 16, 2015 02:31

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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So austerity isn't working in greece because they aren't changing anything in terms of economic growth, because austerity is limiting economic growth

# ¿ Jul 16, 2015 03:51

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Veskit posted:

Alright boys and girls close it down our work here is done. Also you can apply that logic to X country because it's just true.

well yeah, I knew that. I really wanted to believe that austerity would have some way to work. and I guess it does if your economy can support it, but Greece's debt outweighs its GDP so it can't.

# ¿ Jul 16, 2015 03:56

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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So is a civil war in greece quite possible at this point because of Austerity measures?

# ¿ Jul 16, 2015 06:32

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Bob le Moche posted:

I heard austerity being described as what happens when the international capitalist class realizes that colonialism doesn't have to just be a thing you do to periphery countries, you can make the same techniques work in the core too now! I thought that was an interesting take on it.

this makes a lot of sense

# ¿ Jul 17, 2015 21:22

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# ¿ May 8, 2024 09:52

WAR CRIME GIGOLO: Oct 3, 2012; The Hague
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So greece is making their payments now because borrowees are lending them money to pay the borrowers while cutting the economy even further.

Is a Grexit a reality at this point just delayed by forced bailouts?

# ¿ Jul 31, 2015 21:35

The Something Awful Forums > Discussion > Debate & Discussion > How does austerity work