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

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Atreus21

Lifer
Aug 21, 2007
12,017
571
126
I don't understand the difficulty in understanding this.

It seems to me the core of the problem lies in consistently spending way too much money over what you take in. The question then lies with which ideology, left or right, is more at fault for that (since the tone of the thread has devolved into which side's economic position is more at fault).
 
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Fern

Elite Member
Super Moderator
Sep 30, 2003
26,917
173
106
I don't understand the difficulty in understanding this.

It seems to me the core of the problem lies in consistently spending way too much money over what you take in. The question then lies with which ideology, left or right, is more at fault for that (since the tone of the thread has devolved into which side's economic position is more at fault).
To the extent the debate is about who is at fault, well that's a pity because it detracts from the more important discussion of what do now to get out of this mess?

The problem is we have no good answers. We're between a rock and a hard place and the few alternatives left carry danger. One side needs to acknowledge that increased debt comes with negative consequences, the other that decreased govt spending comes with decreased demand for the economy.

Only after achieving that can we move on to the question of how to weigh the various benefits and costs of each side's position. E.g., is govt spending of the same stimulative value to the economy as that of private spending?

On the one hand, arguing that welfare-type payments are of legitimate stimulative value (as Pelosi has done) is absurd. On the other hand, so is arguing that buying cheap (or expensive) Chinese products is.

Fern

Fern
 

nextJin

Golden Member
Apr 16, 2009
1,848
0
0
Do you have any idea how much damage he has done?
Do you have any idea how much damage Bush did? Reagan? Carter? Clinton? FDR?

You sit there and try and make libertarian arguments hating on both parties and usually have no merits. The fundamentals are there, learn them please. Your the reason (along with a few others here) that the tin foil hat shit gets thrown in with the Paul camp.
 
Apr 27, 2012
10,086
58
86
Do you have any idea how much damage Bush did? Reagan? Carter? Clinton? FDR?

You sit there and try and make libertarian arguments hating on both parties and usually have no merits. The fundamentals are there, learn them please. Your the reason (along with a few others here) that the tin foil hat shit gets thrown in with the Paul camp.
Bush did a lot of damage and obama carried it on and made it worse, Regan, Carter, Clinton also did mass damage as well

FDR did massive damage to the US with the New Deal. What I speak is the truth but too many people are partisan hacks
 

nextJin

Golden Member
Apr 16, 2009
1,848
0
0
Bush did a lot of damage and obama carried it on and made it worse, Regan, Carter, Clinton also did mass damage as well

FDR did massive damage to the US with the New Deal. What I speak is the truth but too many people are partisan hacks
specifics
 

hal2kilo

Lifer
Feb 24, 2009
16,963
4,699
136
Bush did a lot of damage and obama carried it on and made it worse, Regan, Carter, Clinton also did mass damage as well

FDR did massive damage to the US with the New Deal. What I speak is the truth but too many people are partisan hacks
Naw, the real culprit is Franklyn Pierce. Damn him to hell!
 
Apr 27, 2012
10,086
58
86
specifics
Bush caused two wars, Patriot Act, Medicare Part D, increased bureacracy, TSA. obama supported the Patriot Act, NDAA, supported the two wars, went into Lybia, assassinated American Citizens, restricted free speech, obamacare,
 

Doppel

Lifer
Feb 5, 2011
13,313
2
0
What some continue to fail to grasp is that the reason much of the world is in a tragic debt balloon is because of "stimulus" spending. Balanced budgets have not been in place for years with deficits covering the difference.

Saying that austerity is evil is like saying dropping a cocaine habit sucks because every time you try you just feel worse. Think long term. Of course cutting back on spending will hurt short term. If you keep thinking like a fruit fly with a short life span you end up not caring about your debt until one day the market tells you to go to hell. Don't believe me, we're watching it right now in Europe. And some implausibly want to give it more money like it needs more debt to grow its economy. This is criminally ridiculous.
 

fskimospy

Elite Member
Mar 10, 2006
71,832
22,008
136
What some continue to fail to grasp is that the reason much of the world is in a tragic debt balloon is because of "stimulus" spending. Balanced budgets have not been in place for years with deficits covering the difference.

Saying that austerity is evil is like saying dropping a cocaine habit sucks because every time you try you just feel worse. Think long term. Of course cutting back on spending will hurt short term. If you keep thinking like a fruit fly with a short life span you end up not caring about your debt until one day the market tells you to go to hell. Don't believe me, we're watching it right now in Europe. And some implausibly want to give it more money like it needs more debt to grow its economy. This is criminally ridiculous.
This is simply factually false and has been disproven on here repeatedly. The austerity being pushed in Europe right now is bordering on criminally incompetent. What's bizarre is that its continuing, utter failure doesn't shake the confidence of its supporters in the slightest. It's like your gut tells you that it should be right, results be damned.

Take Spain for example, before the Euro crisis it had an very low debt/GDP ratio and a budget surplus, a much better fiscal situation than that of Germany, Japan, or the US. Now it's on the brink of collapse while the much more indebted nations are doing far better. What you fail to grasp is that austerity in this environment is self defeating, as is being proven all over Europe.

Exactly how much more failure will it require before you will admit that austerity was a bad idea? Can you give me either a policy movement or some kind of concrete economic circumstances where you would be willing to admit it? I mean the evidence up to this point is overwhelming and you won't accept it. What will it take?
 

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
I am the first to admit I have a next to nothing grasp of economics, and can't compare the recessions we faced here in the US vs. what is going on in Europe. However, it does seem like whatever was done here has had a more positive impact than what was done, or is being done in Europe. I know it is hard to break down such huge economies and problems of this magnitude, but anyone have a bullet list contrasting the differences in recessions and recoveries? Why is Europe having a tougher time?

I see many comments along the lines of "Europe needs more austerity measures", "Austerity does not work", and also "Europe needs to quit spending like drunken sailors". Anything else? Thanks in advance.

edit: One other question: What is a fair and reasonable timeline in determining if austerity measures or stimulus measures are working? Given how interlinked economies are globally these days, not to mention the magnitude and complexities of a US or European economy, would it not take 10 or more years to say for sure what is or is not working? Of course no one wants or can wait that long either.
 
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fskimospy

Elite Member
Mar 10, 2006
71,832
22,008
136
I am the first to admit I have a next to nothing grasp of economics, and can't compare the recessions we faced here in the US vs. what is going on in Europe. However, it does seem like whatever was done here has had a more positive impact than what was done, or is being done in Europe. I know it is hard to break down such huge economies and problems of this magnitude, but anyone have a bullet list contrasting the differences in recessions and recoveries? Why is Europe having a tougher time?

I see many comments along the lines of "Europe needs more austerity measures", "Austerity does not work", and also "Europe needs to quit spending like drunken sailors". Anything else? Thanks in advance.

edit: One other question: What is a fair and reasonable timeline in determining if austerity measures or stimulus measures are working? Given how interlinked economies are globally these days, not to mention the magnitude and complexities of a US or European economy, would it not take 10 or more years to say for sure what is or is not working? Of course no one wants or can wait that long either.
Actually the general economies are not nearly as linked as you think. If I remember correctly, US trade with Europe is somewhere around 2% of US GDP.

As for the effects of austerity, the UK has now officially given a worse economic performance in this recession than it did in the Great Depression.

As far as the outcomes of differing economic policies, well here's a chart of the US, the UK, and the Eurozone's experience after the financial crisis of 2008. (of note, late 2010 is when the Cameron government took over and promised austerity measures.)



That's pretty damning.
 

Franz316

Senior member
Sep 12, 2000
884
229
116
What some continue to fail to grasp is that the reason much of the world is in a tragic debt balloon is because of "stimulus" spending. Balanced budgets have not been in place for years with deficits covering the difference.

Saying that austerity is evil is like saying dropping a cocaine habit sucks because every time you try you just feel worse. Think long term. Of course cutting back on spending will hurt short term. If you keep thinking like a fruit fly with a short life span you end up not caring about your debt until one day the market tells you to go to hell. Don't believe me, we're watching it right now in Europe. And some implausibly want to give it more money like it needs more debt to grow its economy. This is criminally ridiculous.
There is no long term planning currently in the government or in big business. Politicians have to cater in order to get reelected and big business will always go after the quick buck over long term prosperity. The end result is what we have today and it sucks. No one can see beyond their nose.

In addition, the entire world economy is basically a ponzi scheme so it is no surprise they want to solve debt with more debt.
 

davmat787

Diamond Member
Nov 30, 2010
5,514
24
76
Actually the general economies are not nearly as linked as you think. If I remember correctly, US trade with Europe is somewhere around 2% of US GDP.

As for the effects of austerity, the UK has now officially given a worse economic performance in this recession than it did in the Great Depression.

As far as the outcomes of differing economic policies, well here's a chart of the US, the UK, and the Eurozone's experience after the financial crisis of 2008. (of note, late 2010 is when the Cameron government took over and promised austerity measures.)

That's pretty damning.
Thanks for the reply.

So am I safe to assume you attribute the differences in the chart to the stimulus spending vs. UK austerity measures? Seems to be what you are saying. If you happen to have a good laymans read on what exactly the UK's austerity measures comprised of, I would definitely read it. Will check wikipedia for now...

edit: found this, looks like what I am looking for.

United Kingdom Conservative-Liberal coalition government austerity programme
 
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Jhhnn

No Lifer
Nov 11, 1999
61,855
14,003
136
What some continue to fail to grasp is that the reason much of the world is in a tragic debt balloon is because of "stimulus" spending. Balanced budgets have not been in place for years with deficits covering the difference.

Saying that austerity is evil is like saying dropping a cocaine habit sucks because every time you try you just feel worse. Think long term. Of course cutting back on spending will hurt short term. If you keep thinking like a fruit fly with a short life span you end up not caring about your debt until one day the market tells you to go to hell. Don't believe me, we're watching it right now in Europe. And some implausibly want to give it more money like it needs more debt to grow its economy. This is criminally ridiculous.
Analogies to coke habits & family finance never apply to govts, particularly not in a systemic worldwide recession/ depression like today.

We're in a liquidity trap, something that happens when everybody tries to deleverage at the same time. The notion that private enterprise will, for some magical reasons, invest & create jobs in the face of low demand is preposterous. The notion that cutting govt spending, further reducing demand, invoking the confidence fairy is even more preposterous.

UK & American conservatives conflate their ideological agenda with economic reality- they won't let this crisis go to waste, but will rather seek to exploit it because hard money benefits the wealthy rather than the masses, and because they've been successful in blaming big gubmint rather than big money in the minds of their adherents.

Krugman lays it out in the face of hurf-burfing UK conservatives-

http://www.youtube.com/watch?v=_r-AKruzmkk
 

lothar

Diamond Member
Jan 5, 2000
6,674
7
76
Actually the general economies are not nearly as linked as you think. If I remember correctly, US trade with Europe is somewhere around 2% of US GDP.

As for the effects of austerity, the UK has now officially given a worse economic performance in this recession than it did in the Great Depression.

As far as the outcomes of differing economic policies, well here's a chart of the US, the UK, and the Eurozone's experience after the financial crisis of 2008. (of note, late 2010 is when the Cameron government took over and promised austerity measures.)



That's pretty damning.
Explain the sharp drop in 10 year UK bond yields from when Cameron took office.
If anything, it means they can borrow money much cheaper if they need it.

The markets believe that the UK is better now than it was when Gordon Brown left office?

Has austerity affected the Germans yet?
-Lothar
 

fskimospy

Elite Member
Mar 10, 2006
71,832
22,008
136
Explain the sharp drop in 10 year UK bond yields from when Cameron took office.
If anything, it means they can borrow money much cheaper if they need it.

The markets believe that the UK is better now than it was when Gordon Brown left office?

Has austerity affected the Germans yet?
-Lothar
Well since we're on that topic, explain the sharp drop in 10 year US bond yields from when Cameron took office. If you watch US and UK bond trends since 2008 you will notice that they follow a very similar pattern, which should probably suggest a mild effect on bond rates by Cameron's government at best.

US Debt/GDP ratio has been significantly higher than the UK's during this entire period. From about May 2010 to present, UK bonds went from around 3.75% to about 1.75%. US bonds went from about 3.5% to 1.75%. As prospects of a global economic recovery have dimmed again, bond rates have fallen again. This is most likely because we're in a liquidity trap. During the same time, US growth has continued at a modest (but by no means great) pace, and the UK has returned to recession. Is that the austerity effect you're looking for?

Germany has engaged in basically no austerity measures. Its economy has done quite well, partially due to the same reasons why southern Europe is doing so poorly. The Euro is allowing it to export at an artificially low currency rate.
 
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Jhhnn

No Lifer
Nov 11, 1999
61,855
14,003
136
Explain the sharp drop in 10 year UK bond yields from when Cameron took office.
If anything, it means they can borrow money much cheaper if they need it.

The markets believe that the UK is better now than it was when Gordon Brown left office?

Has austerity affected the Germans yet?
-Lothar
Explain it? Flight to safety, same as US bond yields. It has zip to do with the Cameron govt. It's a symptom of a savings glut, a lack of confidence in the economy because of low demand.

Germany? There's no austerity in Germany, although they talk a good game, preaching to the EU periphery.
 

freegeeks

Diamond Member
May 7, 2001
5,460
1
71
Explain it? Flight to safety, same as US bond yields. It has zip to do with the Cameron govt. It's a symptom of a savings glut, a lack of confidence in the economy because of low demand.

Germany? There's no austerity in Germany, although they talk a good game, preaching to the EU periphery.
get your facts straight, austerity in has been going on in Germany for 10 years now, that's why their economy is so competitive right now. Germany was called the "sick man" 10 years ago. Former Chancellor Gerhard Schröder started the "Agenda 2010" reforms in 2003 and the so called Hartz reforms are still in effect. A big part of these plans were austerity measures that are still in effect today.

I wonder where some of you spend spend spend guys get your information. I'm Belgian and I am happy that our German overlords are stomping some fiscal sense into my govt. I rather take the pain now and emerge with a competitive economy then be dragged in the Greek and Spain fiasco. F$ck all those Club Med countries, kick them out of the EU and let them go back to their heavily devaluated currencies. I will happily buy me a nice vacation home in Spain with my hard Euro
 

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