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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. 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 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.
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Jul 16, 2015 02:19
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LeoMarr posted:so Austerity works if people are austere in a sense. In a sense yes. LeoMarr posted:But greek people still live in the city state mindset and dont work towards a common goal? In a sense no. Austerity works for you if you have the money to be austere. The only way you can choose not to spend money is if you spend less than you make. For example if I as an american make 50k a year, but it costs 50k a year to maintain my lifestyle of having a wife, two children a dog and a modest 3 bedroom house, I'm going to have a very hard time being austere regardless of what my mindset is or the country's goal. Then you have to ask how much easier is my country making it for me at that lifestyle? Are there available public transportation so I don't need to own a car, or do I have to eat automobile costs? Do I have subsidized rent? What about healthcare costs, ect ect the lists goes on. An austere country would make you pay for all of these things, but hey if I make enough money, that's not really a pain to be austere now is it? Say I make 50,000,000 dollars a year. I'd certainly want an austere culture because I can afford a grand lifestyle and still pocket a million a year in hard cash and put another half of that into growth opportunities and grow more and more. It's EXTREMELY easy to be austere in this scenario. HOWEVER if you're Greece, and you have 25% unemployment in 2014, do you even have a choice to be austere? If so how? Well, if your rich people have uneven power based on their wealth and vote for austerity, then the poor have little power and want things like medical care, retirement benefits and so forth, and the rich wins and you're an austere nation then it doesn't matter if you're on board with the mindset to be austere, you're hosed. Veskit fucked around with this message at 02:58 on Jul 16, 2015 |
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Jul 16, 2015 02:49
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Lastly, the only way you can be austere is if you have export surplus because you have to not only produce,  you also have to sell your goods to someone and if your nation is austere, you can't really sell to your austere people now can you?Shbobdb posted: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. Germany can easily afford it but doesn't want to because it'd piss off rich people. You print the money and inflate your currency.
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Jul 16, 2015 03:00
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LeoMarr posted:So austerity isn't working in greece because they aren't changing anything in terms of economic growth, because austerity is limiting economic growth 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.
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Jul 16, 2015 03:55
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LeoMarr posted:I guess it does if your economy can support it Once again, you have to go back and explain what your definition of "work" is. In Greece you would be hard pressed to say it could work on any level, but how is austerity working for Germany?
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Jul 16, 2015 04:10
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demonicon posted:So that means that Germany actually exports most of its stuff to the US and Asia. That means that the argument, that within the Eu some nations have to import everything germany produces is bullshit. Ohhh please. PIIGS is like what, 11% of the economy and they have barely any ability to import so yeah the trade will be balanced because Germany lost a huge market to export to within the EU. They can't afford to import anymore.
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Jul 16, 2015 04:59
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demonicon posted:So if Germany lost a huge market, why did its exports actually increase?   
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Jul 16, 2015 05:08
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demonicon posted:Okay so Germany increased its exports to markets outside the Eu? So you agree that eu countries don't have to be net importers for Germany to be a net exporter? Make a question in which all things are equal please.
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Jul 16, 2015 18:09
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Uroboros posted:Also, is there a way to merely compartmentalize Greece's current debt with NO further interest? Have them set a new balanced budget that is set to pay back the current debt slowly overtime with no threat of further accumulating interest? I think you need to take 5 steps backward on how economics works and that'll kind of answer your question, or I am not understanding what you're asking. What exactly do you mean by compartmentalize the debt with no interest? If it's confusing can you draw a comparison to a mortgage?
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Jul 16, 2015 22:14
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asdf32 posted:Also, to be clear, austerity isn't a reaction to recession. It's a reaction to debt. It's a reaction to growth dumbshoe.
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Jul 23, 2015 22:40
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