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Battered Britain hovers on the edge of double-dip recession OFFICIAL: Double dip!!!

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PokerGuy

Lifer
Jul 2, 2005
13,650
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I guess this is going to be the new liberal scapegoat for when their policies continue to fail. "It's austerity! Yeah, that's the problem! It has nothing to do with our decades of spending like drunken sailors, or with our ever-expanding government." Deficit spending is the problem, not the correction of that deficit spending that causes a necessary contraction.
 

fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
136
I guess this is going to be the new liberal scapegoat for when their policies continue to fail. "It's austerity! Yeah, that's the problem! It has nothing to do with our decades of spending like drunken sailors, or with our ever-expanding government." Deficit spending is the problem, not the correction of that deficit spending that causes a necessary contraction.
Like I said, an article of faith. No amount of evidence will disprove your religious belief that conservatism cannot fail, it can only be failed. You can watch, right now, the solutions offered by conservative policymakers not only fail to achieve their objectives, but cause the exact opposite of what they said would happen. Meaning...their policies were wrong.

Rational people would rethink their assumptions in such a case. I do not hold out such hope here however.
 

rudder

Lifer
Nov 9, 2000
19,434
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Just to reinforce the point, here's the "failed" stimulus in action:
So that is what $5 Trillion gets you. If we go another $5 trillion in the hole... think of the unemployment rate then! My grandkids will hate you... but do we really care what they think since they are not even born yet?
 

senseamp

Lifer
Feb 5, 2006
35,038
5,125
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So that is what $5 Trillion gets you. If we go another $5 trillion in the hole... think of the unemployment rate then! My grandkids will hate you... but do we really care what they think since they are not even born yet?
Those grandkids are better off with the stimulus too. Second great depression would not be good for anyone.
 

Genx87

Lifer
Apr 8, 2002
41,063
495
126
This is simply factually incorrect.

Austerity in this case is the result of changing economic circumstances. If you are running 'conservative' policies, we can fairly presume that means a balanced budget, correct? If you are faced with a severe economic contraction of this sort, that will cause both higher social safety net costs as well as dramatically lower revenues. (even if you eliminate all social spending, you will have decreased revenues.) Without any overspending whatsoever you will find yourself in a place where you must decrease government expenditures, hence austerity.

Decreasing government expenditures in the face of economic depression is proving the world over to be a catastrophe.
That is all fine and dandy except none of these govts were balancing their budgets to begin with anyways. So they ran on liberal policy of overspending and expansion of govt for decades. When a financial crisis hit their house of cards couldnt handle couldnt handle a sneeze from 3 feet away. To claim conservative policy is the reason for this is silly. These govts followed the doctrine of big govt and failed. The financial crisis exposed the underlying issues of putting the govt as central to an economy. Cuts hurt the economy, expansions cost too much for little gain.

Greece's problem were a result of what? Too much austerity or too much spending?

You can claim austerity measures are proving a catastrophe. That is fine. But realize they were forced on these countries due to their excessive govt's. They, the citizens, simply were\are unable to afford them anymore.
 

fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
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That is all fine and dandy except none of these govts were balancing their budgets to begin with anyways. So they ran on liberal policy of overspending and expansion of govt for decades. When a financial crisis hit their house of cards couldnt handle couldnt handle a sneeze from 3 feet away. To claim conservative policy is the reason for this is silly. These govts followed the doctrine of big govt and failed. The financial crisis exposed the underlying issues of putting the govt as central to an economy. Cuts hurt the economy, expansions cost too much for little gain.

Greece's problem were a result of what? Too much austerity or too much spending?

You can claim austerity measures are proving a catastrophe. That is fine. But realize they were forced on these countries due to their excessive govt's. They, the citizens, simply were\are unable to afford them anymore.
This is also just wrong. Every nation with its own currency could have continued deficit spending were it to have chosen to do so. Some opted for austerity measures, some did not. Nothing was 'forced'. What Europe and the UK are doing right now is explicitly conservative policy, and it is failing. The US has unfortunately not undertaken liberal economic policy, but has more just held the line on government spending. The US' economic performance through this crisis, while not good, has been far superior.

I am also tired of hearing about Greece, and the myth that these governments are somehow unaffordable. That is just clearly, utterly false. Greece is an example of extreme financial irresponsibility and are absolutely a case of government run amok. It also has basically no relation to the rest of the Eurozone or the US. Greece ran up huge debts in the years before the financial crisis.

What about Italy? They had a primary budget surplus before the crisis and a steadily decreasing debt/GDP ratio. Spain had a large budget surplus before the crisis and a debt/GDP ratio of 26%. How is Spain an example of austerity forced by excessive government? Spain has undertaken austerity measures after the financial crisis, and like everywhere else that it's been tried, conservative fiscal policy in this downturn is failing catastrophically. You don't get to blame liberals for that, their financial house was in order. You have to put the blame squarely where it lies, on foolish conservative economic policy. Not to mention that a number of the states with the largest proportion of government to the economy are doing just fine during this crisis. Why is it that the percentage of GDP consumed by government spending has basically no relationship with how they are faring? If government is 'simply unaffordable', this relationship should be crystal clear. It's not.

What we're seeing right now is that Europe and the US have undergone a grand social and economic experiment. We will see which policies work better in the end, and right now the US is winning by a country mile. Soon (or perhaps already) we will see conservatives desperately looking for reasons why it wasn't their ideology's fault that their policies failed in reality, which is sad.
 

PokerGuy

Lifer
Jul 2, 2005
13,650
199
101
You can watch, right now, the solutions offered by conservative policymakers not only fail to achieve their objectives, but cause the exact opposite of what they said would happen.
Can you show me where anyone said the spending cuts would result in immediate growth? It takes time to start reversing the damage of decades of overspending.
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,907
173
106
Thinking back, it seems people thought the USA, and it's consumerism, was the engine driving the world's economy.

Well, we hit a wall and all that came to a stop and there's nothing to replace us. Their govts can't and the Chinese won't.

Double dips and weak economies are to be expected. Get used to it.

Fern
 

senseamp

Lifer
Feb 5, 2006
35,038
5,125
126
Fiscal austerity and tight monetary policy, both things supported by Republicans, have failed where they were tried.
 

Phokus

Lifer
Nov 20, 1999
22,995
774
126
I guess this is going to be the new liberal scapegoat for when their policies continue to fail. "It's austerity! Yeah, that's the problem! It has nothing to do with our decades of spending like drunken sailors, or with our ever-expanding government." Deficit spending is the problem, not the correction of that deficit spending that causes a necessary contraction.
Uhm, the brits enacted austerity and it bit them in the ass in both the long AND short term. The right play for them would have been to boost short term government expenditures while cutting some long term ones, but because they decided to go full on retard conservative and enact austerity, they are fucking themselves in BOTH The short term AND long term. They will have larger short term AND long term deficits/debt because of austerity measures.
 

Phokus

Lifer
Nov 20, 1999
22,995
774
126
So that is what $5 Trillion gets you. If we go another $5 trillion in the hole... think of the unemployment rate then! My grandkids will hate you... but do we really care what they think since they are not even born yet?
It's not an 'either or' proposition, you can enact stimulus in the short term while cutting down long term spending.

The most disastrous thing you can do is enact austerity for the short term spending because all you will do is create more unemployment, driving down wages, shuttering more businesses, while debt stays the same. It's a nasty spiral.
 

fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
136
Can you show me where anyone said the spending cuts would result in immediate growth? It takes time to start reversing the damage of decades of overspending.
The head of the European Central Bank, for one.

The idea that austerity measures could trigger stagnation is incorrect,... confidence-inspiring policies will foster and not hamper economic recovery. -J.C. Trichet
Source:
http://econ.economicshelp.org/2010/07/double-dip-recession.html

Yeah, he was pretty spectacularly wrong.
 

senseamp

Lifer
Feb 5, 2006
35,038
5,125
126
The confidence fairy that the Republicans believe would show up if we cut spending has failed to materialize in Europe, but hey let's try it in America, we are different after all.
 

PokerGuy

Lifer
Jul 2, 2005
13,650
199
101
Uhm, the brits enacted austerity and it bit them in the ass in both the long AND short term.
The measures they put in place to get their spending under control (aka, "austerity") are just now starting to actually go into effect or make an impact. You have a crystal ball that shows what will mean 5, 10, 20 years down the road? It takes a while to undo decades of overspending.
 

hal2kilo

Lifer
Feb 24, 2009
18,230
5,441
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The confidence fairy that the Republicans believe would show up if we cut spending has failed to materialize in Europe, but hey let's try it in America, we are different after all.
Bu, bu, but, I thought anything that Europe does is supposed to be automatically rejected if you are a conservative.
 

PokerGuy

Lifer
Jul 2, 2005
13,650
199
101
The head of the European Central Bank, for one.

Source:
http://econ.economicshelp.org/2010/07/double-dip-recession.html

Yeah, he was pretty spectacularly wrong.
Uh, no, he wasn't. Is everyone just simply unfamiliar with the concept of long term versus short term? Fixing systemic overspending is neither easy nor painless, but it has to happen for long term financial health.

Even in the article you linked to, where they claim woe and terrible things for the UK because of such horrible "austerity", they have this:

The weakness of the pound is starting to change. Markets see that the UK economy is perhaps a better prospect than the Eurozone.
In other words, the markets see that in the long term the UK economy is going to be stronger because they are addressing the problem instead of kicking the can down the road and continuing to spend recklessly.
 
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fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
136
The measures they put in place to get their spending under control (aka, "austerity") are just now starting to actually go into effect or make an impact. You have a crystal ball that shows what will mean 5, 10, 20 years down the road? It takes a while to undo decades of overspending.
So despite austerity measures not having their predicted short term effect, how long until we can declare these policies a failure? Can you give us a set of outcomes and a time frame in which you would be willing to admit that austerity was a bad idea?
 

PokerGuy

Lifer
Jul 2, 2005
13,650
199
101
So despite austerity measures not having their predicted short term effect, how long until we can declare these policies a failure? Can you give us a set of outcomes and a time frame in which you would be willing to admit that austerity was a bad idea?
My timeline for concluding that austerity was a bad idea is about the same as the timeline for determining that deficit spending is a bad idea. In other words, it depends on a lot of factors. Time will tell, but anyone who thought there would be a short term "fix" for a systemic problem on the heels of a worldwide economic crisis is delusional.
 

fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
136
Uh, no, he wasn't. Is everyone just simply unfamiliar with the concept of long term versus short term? Fixing systemic overspending is neither easy nor painless, but it has to happen for long term financial health.
Uh no, he was. I guess I should have continued quoting because the next part of that quote is:

...because confidence is the key factor today
He is clearly talking about present economic effects, not long term ones. You might wish the proponents of austerity didn't make such hilariously wrong arguments, but they most certainly did. They were exhibit A for those who believed in the Confidence Fairy.

Even in the article you linked to, where they claim woe and terrible things for the UK because of such horrible "austerity", they have this:

In other words, the markets see that in the long term the UK economy is going to be stronger because they addressing the problem instead of kicking the can down the road and continuing to spend recklessly.
This is nonsensical. The Eurozone is also undertaking large scale austerity measures that are also failing. How you are going to validate austerity by showing that one poorly performing economy due to austerity is doing less poorly than other poorly performing economies due to austerity should be an impressive intellectual exercise.
 

fskimospy

Elite Member
Mar 10, 2006
73,390
25,176
136
My timeline for concluding that austerity was a bad idea is about the same as the timeline for determining that deficit spending is a bad idea. In other words, it depends on a lot of factors. Time will tell, but anyone who thought there would be a short term "fix" for a systemic problem on the heels of a worldwide economic crisis is delusional.
So in other words, basically nothing will ever shake your belief in it. If you can't tell us a set of circumstances by which your ideas will be proven wrong, they are simply articles of faith. Not to mention that a number of those countries were not overspending before the crisis. (spain for example)

As for deficit spending in this situation being a bad idea, I can easily tell you what would have disproved it for me. Had expansionary austerity really worked, that would have been one. We are approaching the 5 year mark for this economic crisis. Had austerity minded governments' growth generally tracked with or had exceeded that of the US's at lower debt/gdp ratios that would also have done so.

None of that has happened. In fact, the exact opposite has happened. In the near future I believe you will see more and more governments jettison austerity measures as the failure that they are. France seems to be the first, followed by the UK in their next elections.
 

PokerGuy

Lifer
Jul 2, 2005
13,650
199
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Uh no, he was. I guess I should have continued quoting because the next part of that quote is:

He is clearly talking about present economic effects, not long term ones.
Nonsense. Are you being purposely obtuse? He said confidence is the key factor today. Any results of changes in that confidence (which, by the way, is impacted by a multitude of additional factors beyond spending levels) won't actually be felt for an extended period of time. For example, capital investment decisions take at least a year or two before they are really felt.

This is nonsensical. The Eurozone is also undertaking large scale austerity measures that are also failing. How you are going to validate austerity by showing that one poorly performing economy due to austerity is doing less poorly than other poorly performing economies due to austerity should be an impressive intellectual exercise.
For starters, you're incorrectly assuming any of the economies do poorly because of austerity. They are doing poorly for a variety of factors, austerity is a mechanism to correct for prior mismanagement. Second, if you'd like to look, the GBP has also been climbing against the USD and other currencies this year, the market is showing confidence in the GBP even though it's in a double dip recession.
 

Jaskalas

Lifer
Jun 23, 2004
30,283
3,812
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Fiscal austerity and tight monetary policy, both things supported by Republicans, have failed where they were tried.
You think spending what you DO NOT have is sound monetary policy?

It can easily be said it works in a short term, temporarily, but you're in this for the long haul. For the permanent solution to everything. It has been 4 years and $5 trillion, and your answer never waivers from "Spend Spend Spend!".
 

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