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Britain's tough love austerity measures vs USA's pandering

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Seeing as how the UK is now entering another drop in economic activity its fair to say the economy isn't exactly brightening up after austerity. Its also not having much effect on the deficit either because tax revenues are so low as unemployment is so high.

4 years of on/off recession is pretty bad and it shows all the hallmarks of a depression that will last as long as the austerity. So until there is a change in government.
 
werepossum said:
So when can we declare "good times" and cut spending back to sane levels?

We're spending the equivalent of TARP and Stimulus Rex every year now and the left is still calling it austerity. Face it, dude, the same people calling for more spending now are going to be calling for more spending EVERY year until we crash and literally cannot borrow more money - at which point they'll be calling for creating more money for stimulus spending. Even the Republican Congresses under Clinton 1994 - 2000 never cut spending, only the rate of spending growth.
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Face it dude, you're just making things up. What is stimulus rex?
 
JEDI said:
http://money.cnn.com/2012/12/24/news/economy/britain-austerity/index.html?iid=EL

Britain has stuck fast to its austerity program of spending cuts and tax hikes, despite evidence that the economy will shrink this year. The government said earlier in December that the belt tightening would have to continue into 2018, which is a year longer than expected.


Britain is sacrificing short term to have a better long term future.
The US is sacrificing it's long term future for a status quo now.

I still couldnt believe the US made the temporary Bush tax cuts permanent for 99% of its citizens. Plus kicked the can on cutting spending (again).

I was surprised Obama/democrats didnt counter the Republican's claim of tax hikes with it's a TEMPORARY tax cut that lasted years longer than it should have.

Unfortunately, I dont see the US doing an austerity measure like Britain's during Obama's 2nd term.

Thus I see Britain as being better off financially than the US later this decade.


Your take?
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USA doesn't have too, they'll just keep the printing happening and increase spending on its military, which is a 100x stronger then it's nearest rival.....peon
 
There is a danger that not using austerity measures just increases the length and the pain of the Depression we are in. It did not do much for Japan.

There is no way in hell we can afford O'Bammacare. A one size fits all medical plan will not work and is inefficient. If the Government cant manage Medicar and SSN in an economical fashion, then how will it manage an entire's nation healthcare? Just take a look at how it manages the healthcare of veterans. That is what you are asking for.

Pretty soon a loaf of bread will be $50.00
 
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My take? Our politicians are pitiful failures who only care about themselves. In 100 years people will read about the USA in history books.
 
piasabird said:
There is a danger that not using austerity measures just increases the length and the pain of the Depression we are in. It did not do much for Japan.

There is no way in hell we can afford O'Bammacare. A one size fits all medical plan will not work and is inefficient. If the Government cant manage Medicar and SSN in an economical fashion, then how will it manage an entire's nation healthcare? Just take a look at how it manages the healthcare of veterans. That is what you are asking for.

Pretty soon a loaf of bread will be $50.00
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First off, a single payer system is the most efficient form of healthcare unless you are willing to utterly turn away, or at least underwrite, people who will do nothing more than default and declare bankruptcy. One way or another you are paying for them.

Second, the cost of Medicare are skyrocketing because of the first problem. If the government got out of their way and the righties let it happen we could have far better medical care overall. Sure, some would take cuts but we would, overall, have a healthier society. This has multiple benefits, including bankruptcy and productivity gains.

And as far as social security, one of the biggest problems with it is there are too many dependents that spend a lot of their income on healthcare. If there was a better, cheaper, system put it in place they could probably even survive a cut to income from SS. That, in addition to increasing the retirement age, would do wonders for the system.
 
Mursilis said:
Aside from the Clinton years when the U.S. briefly dipped into a surplus, when was this? We were still in deficit for most of the good years during Reagan's terms, and non-discretionary spending has only expanded since then.
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so ? the baby boom didn't last forever. Our effect is temporary.

The only thing that needs to change is politics. It took about 11 years to get tax rates back to a sensible level after a purely political ploy to get Bush elected in 2000. Barely.

Wanna know a secret ? The bloody Republicans are more glad than the Democrats that they were "forced" into a corner and had to compromise without seeming to.
 
Mursilis said:
Aside from the Clinton years when the U.S. briefly dipped into a surplus, when was this? We were still in deficit for most of the good years during Reagan's terms, and non-discretionary spending has only expanded since then.
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If you search for a historical chart of us debt/gdp ratios you will see a number if such cases actually. I am on my phone so i can't link to it right now, but it shouldn't be hard to find.
 
Mursilis said:
Aside from the Clinton years when the U.S. briefly dipped into a surplus, when was this?
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Dude its been 13 years and this lying still persists. Why? There was never a surplus under Clinton. Never.

Here are the number from the Treasury:

Code: 
09/30/1999 	5,656,270,901,615.43
09/30/1998 	5,526,193,008,897.62
09/30/1997 	5,413,146,011,397.34
09/30/1996 	5,224,810,939,135.73
09/29/1995 	4,973,982,900,709.39
09/30/1994 	4,692,749,910,013.32
09/30/1993 	4,411,488,883,139.38
09/30/1992 	4,064,620,655,521.66
09/30/1991 	3,665,303,351,697.03
09/28/1990 	3,233,313,451,777.2

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

The debt never went down. Therefore there was never a surplus. Never not ever. Look how easy it is for this controlled soviet style media to convince millions to believe anything, even blatantly false data that can be found right out in the open.
 
sm625 said:
Dude its been 13 years and this lying still persists. Why? There was never a surplus under Clinton. Never.

Here are the number from the Treasury:

Code: 
09/30/1999 	5,656,270,901,615.43
09/30/1998 	5,526,193,008,897.62
09/30/1997 	5,413,146,011,397.34
09/30/1996 	5,224,810,939,135.73
09/29/1995 	4,973,982,900,709.39
09/30/1994 	4,692,749,910,013.32
09/30/1993 	4,411,488,883,139.38
09/30/1992 	4,064,620,655,521.66
09/30/1991 	3,665,303,351,697.03
09/28/1990 	3,233,313,451,777.2

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

The debt never went down. Therefore there was never a surplus. Never not ever. Look how easy it is for this controlled soviet style media to convince millions to believe anything, even blatantly false data that can be found right out in the open.
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reason to why the surplus wasn't:
Interestingly, this most likely was not even a conscious decision by Clinton. The Social Security Administration is legally required to take all its surpluses and buy U.S. Government securities, and the U.S. Government readily sells those securities--which automatically and immediately becomes intragovernmental holdings. The economy was doing well due to the dot-com bubble and people were earning a lot of money and paying a lot into Social Security. Since Social Security had more money coming in than it had to pay in benefits to retired persons, all that extra money was immediately used to buy U.S. Government securities. The government was still running deficits, but since there was so much money coming from excess Social Security contributions there was no need to borrow more money directly from the public. As such, the public debt went down while intragovernmental holdings continued to skyrocket.
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sm625 said:
The debt never went down. Therefore there was never a surplus. Never not ever. Look how easy it is for this controlled soviet style media to convince millions to believe anything, even blatantly false data that can be found right out in the open.
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Suppose I make $20,000 per month, and have $500,000 cash on hand. I want to buy a house; I'm looking at a $350,000 one. I could pay in cash, but I'd rather get a mortgage and invest my cash on hand. So my debt is going up, even though I'm running a surplus.
 
ShintaiDK said:
Lets see, the average age of a firsttime buyer in the London area is now above 50 years.

The private debt to GDP is around ~850%. Only beaten by Ireland in the entire world.
People seems too focused on the public debt, but forget the private.

The finance sector in England is a large part of the GDP. (Makes you think Iceland.)

Also austerity methods doesnt work. You cant cut yourself out of a crisis so to say.

The main problem is, like all others. Instead of cutting spending when the economy goes well. The surplus is wasted on tax cuts without any benefits and extra spending. While that money should be used when the economy, as it always does, goes downhill for a period and you need to create temporary/permanent jobs to kickstart the economy again.
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This is true.
 
It's astounding how many times throughout history austerity has been shown to fail as a tool to combat recession, yet people still prescribe the same old medicine. Austerity, particularly in a consumer driven economy, makes absolutely zero economic sense as a tool to combat slumping demand. It's the equivalent of bloodletting to combat an infection. Government spending is 40% of GDP. Is that a problem? You could make a great argument that it is, but when an economy enters into a recession, triggered by a massive slump in consumer demand, why in the hell would the prescribed course of correction be for the massive consumer that is the government to pull back and depress the economy even more, possibly past it's tipping point? It makes even less sense when you consider that US government bonds are a principal safe haven during times of economic uncertainty, which drives borrowing costs way down, making an even better case for debt spending during a recession.

You pull back government spending in period of economic growth when you can offset government cuts with private sector growth. This is economics 101. The US has weathered the recession much better than some of our European counterparts thanks to government stimulus. People just like to forget how close to the brink this country was to a major economic calamity now that it's mostly in the rear view mirror.
 
Why do people insist on ignoring the results of Herbert Hoover's efforts to balance the federal budget during a weak economy?

Right now, I am more concerned about jobs than deficits.
 
Siddhartha said:
Why do people insist on ignoring the results of Herbert Hoover's efforts to balance the federal budget during a weak economy?

Right now, I am more concerned about jobs than deficits.
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Or hell, even Roosevelt's attempt to balance the budget too soon. People see what they want to see.
 
The percentage of tax revenue used to pay interest on debt is the main metric that is the problem.
I think it is around 10% in the US. Not that bad.

Anyway, the catch-22 is if they use austerity to cut the debt, the tax revenues fall and the percent of tax revenue used to service debt increases anyway.

If they try to spend their way out, they increase debt and the percent of tax revenue used to service debt increases.

In reality there is something structurally wrong with the economy and a business cycle crash will clear out the inefficient businesses so new ones can take their place. Which is a painful process no one apparently has the balls to go through anymore.
 
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