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

[JEDI]

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?

 

[Gonad the Barbarian]

http://money.cnn.com/2012/12/24/news/economy/britain-austerity/index.html?iid=EL
Thus I see Britain as being better off financially than the US later this decade.

And when that doesn't happen they'll just have to stick with the austerity just a little bit longer to get there won't they? Austerity is plain bad fiscal policy during a recession. Did you miss where the head of the IMF said this was one giant fuck up?
http://www.washingtonpost.com/blogs...s-much-worse-for-the-economy-than-we-thought/
Apparently the British government did too.
http://www.guardian.co.uk/business/2013/jan/24/osborne-dismisses-imf-caution-fiscal
But keep your eyes closed and your fists clinched and believe hard enough and one day those faith-based economics are bound to work.

 

[Ausm]

And when that doesn't happen they'll just have to stick with the austerity just a little bit longer to get there won't they? Austerity is plain bad fiscal policy during a recession. Did you miss where the head of the IMF said this was one giant fuck up?
http://www.washingtonpost.com/blogs...s-much-worse-for-the-economy-than-we-thought/
Apparently the British government did too.
http://www.guardian.co.uk/business/2013/jan/24/osborne-dismisses-imf-caution-fiscal
But keep your eyes closed and your fists clinched and believe hard enough and one day those faith-based economics are bound to work.

:biggrin::awe:

 

[fskimospy]

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?

If the US has a brain in its collective head it will stay away from austerity policies like those implemented in the UK.

What's the best evidence against the UK's policies? Their effect in the UK since they have been implemented.

 

[Mursilis]

Austerity is plain bad fiscal policy during a recession.

Evidence does seem to suggest that, as far as I can tell. Isn't the other half of that theory, however, that austerity is good fiscal policy once the economy recovers? And honestly, what are the odds of that actually happening? Clearly, democracy's fatal flaw is that most people will happily mortgage the long-term for betterment of the short-term. Hence, most democracies run deficits which are difficult to rein in. I don't see the US being any different.

 

[fskimospy]

Evidence does seem to suggest that, as far as I can tell. Isn't the other half of that theory, however, that austerity is good fiscal policy once the economy recovers? And honestly, what are the odds of that actually happening? Clearly, democracy's fatal flaw is that most people will happily mortgage the long-term for betterment of the short-term. Hence, most democracies run deficits which are difficult to rein in. I don't see the US being any different.

Actually the US has done just that on a number of occasions in the past. When the economy recovers we should most certainly engage in deficit and debt/gdp ratio reduction. That's the only way we will be free to deficit spend liberally in the next downturn.

 

[Mursilis]

Actually the US has done just that on a number of occasions in the past. When the economy recovers we should most certainly engage in deficit and debt/gdp ratio reduction. That's the only way we will be free to deficit spend liberally in the next downturn.

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.

 

[highland145]

Are there any ballpark figures on the amount of waste, fraud, pork, bridges to nowhere that the govt blows each year?

 

[ShintaiDK]

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.

 

[Atreus21]

And when that doesn't happen they'll just have to stick with the austerity just a little bit longer to get there won't they? Austerity is plain bad fiscal policy during a recession. Did you miss where the head of the IMF said this was one giant fuck up?
http://www.washingtonpost.com/blogs...s-much-worse-for-the-economy-than-we-thought/
Apparently the British government did too.
http://www.guardian.co.uk/business/2013/jan/24/osborne-dismisses-imf-caution-fiscal
But keep your eyes closed and your fists clinched and believe hard enough and one day those faith-based economics are bound to work.

I've always loved the allegation of economics being faith-based by disagreeing with the claim that the cure for every economic malady is almost literally spending into infinity.

 

[Incorruptible]

When will people understand that austerity is what works? Stimulus spending doesn't work and will only make the situation worse

 

[thraashman]

When will people understand that austerity is what works? Stimulus spending doesn't work and will only make the situation worse

Well people will understand that when reality and facts change to make it true. Until then we'll understand that austerity doesn't work because we live in the real world.

 

[Greenman]

I've always loved the allegation of economics being faith-based by disagreeing with the claim that the cure for every economic malady is almost literally spending into infinity.

I've wondered about that as well. I suppose I'm simple minded in that I've always thought that when you make less you spend less.
I get spending to keep the economy moving, but how far does it go? How much of our tax base has to go to debt service before we should stop? I'd like to see a real number attached to that. I also wonder about the reality of government spending to prop up our economy. If we have too spend a trillion dollars a year to keep it afloat, hasn't it already failed?

I don't much about economics, but if the answer to every single problem is to borrow more money, that leads me to believe most other people don't know much about it either.

 

[Jaskalas]

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.

That surplus was a raid against social security during an extremely strong economic boom. We seized money from it, placed it into the general fund, called it revenue (a surplus) and returned home as happy drunks.

People still sing of it today, so maybe we should do it again.

 

[Mursilis]

That surplus was a raid against social security during an extremely strong economic boom. We seized money from it, placed it into the general fund, called it revenue (a surplus) and returned home as happy drunks.

People still sing of it today, so maybe we should do it again.

I've questioned the legitimacy of the Clinton "surpluses" before, so I'm not disagreeing with you, but by the government's own standards of book-cooking, we had a surplus for a few years there. And how briefly it lasted, too, before it resulted in both tax-cutting and additional spending. I no more trust an elected politician of either party to use a surplus to pay down debt than I trust a thief to guard my bank account. I really see no end to deficit spending, at least in my lifetime.

 

[Matt1970]

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.

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


Your take?

At some point you have to put the brakes on the spending. Austerity now like Britain is doing will mean they will be in better shape when the next recession hits without a crippling accumulation of debt.

 

[Zebo]

US is fuked long term and investors that matter know it.
http://www.moneynews.com/MKTNews/bi.../450265?PROMO_CODE=110D8-1&utm_source=taboola

 

[fskimospy]

I've always loved the allegation of economics being faith-based by disagreeing with the claim that the cure for every economic malady is almost literally spending into infinity.

Can you perhaps give us a list of those who you think claim this? Surely you have to know what an absurd straw man this is.

 

[Gonad the Barbarian]

At some point you have to put the brakes on the spending. Austerity now like Britain is doing will mean they will be in better shape when the next recession hits without a crippling accumulation of debt.

Austerity now like Britain is doing will mean their next recession will still be this one.

 

[werepossum]

That surplus was a raid against social security during an extremely strong economic boom. We seized money from it, placed it into the general fund, called it revenue (a surplus) and returned home as happy drunks.

People still sing of it today, so maybe we should do it again.

Social Security receipts have always been placed in the general fund. Reagan had an initiative that passed to become law requiring Social Security receipts to remain within the Social Security system, but all that really changed was that IOUs are now written as the money is removed and spent.

 

[werepossum]

Can you perhaps give us a list of those who you think claim this? Surely you have to know what an absurd straw man this is.

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.

 

[Zebo]

^ cant we're in last bubble POSSIBLE govt bubble with FED backstopping its client the treasury for a day that can't come because of too much leverage/debt at all levels. Only hyperinflation Wiemar republic style awaits this poor arithmetic as Bill Clinton calls it. Austerity would collapse US economy since so many things depends on Govt spending. Taxes wouldn't but none go there.

Do yourself a favor and protect yourself read things by ppl who were right - right about tech crash right about housing bubble not polly anna liars hiding ruin with more ruin. http://www.amazon.com/Aftershock-Pro...tt_at_ep_dpt_1

 

[LegendKiller]

US is fuked long term and investors that matter know it.
http://www.moneynews.com/MKTNews/bi.../450265?PROMO_CODE=110D8-1&utm_source=taboola

So all this yahoo listed is what they sold, not what they bought. So is Paulson, Buffett and Soros sitting in cash?

ROFL.

Then the fool who says that as inflation surges companies will have to pay more for debt. It's called deleveraging, they are carrying a large amount of debt now (and cash) as borrowing costs are low. They can unwind that relatively easily.

Then to go on and say that rates crush housing, sorry, but that's utter stupidity. If the economy is improving, which is why that money would be hitting the market, then more people will be able to afford more houses, absorbing excess capacity. Finally, this is not the first time rates increased.


To show how much of a one-sided idiot the author is, let's look at the *FULL* BRK story...

First off, Buffett bought a fucking railway, IIRC his biggest acquisition ever and a very significant one since his railway is not only heavily into oil sands but is also one of the bigger consumer goods fright shippers.

http://www.marketwatch.com/story/bu...-berkshire-hathaway-stock-holdings-2012-11-14

Then there is huge position increases in KO, WFC, WABCO, Viacom, precision castparts, national oil well.

Yup, sounds like a guy completely dumping stocks.

 

[LegendKiller]

^ cant we're in last bubble POSSIBLE govt bubble with FED backstopping its client the treasury for a day that can't come because of too much leverage/debt at all levels. Only hyperinflation Wiemar republic style awaits this poor arithmetic as Bill Clinton calls it. Austerity would collapse US economy since so many things depends on Govt spending. Taxes wouldn't but none go there.

Do yourself a favor and protect yourself read things by ppl who were right - right about tech crash right about housing bubble not polly anna liars hiding ruin with more ruin. http://www.amazon.com/Aftershock-Pro...tt_at_ep_dpt_1

ROFL, "hyperinflation Wiemar" style. That just proves, immediately, you have no fucking clue about this topic.

Do you even know what the difference is between Wiemar and Zimbabwe or the South American countries or the US is? Do you even realize what causes a currency collapse?

Of course not, you read a book written by people who predicted the collapse in 2006 (2 full years after I was writing about it). WOW, FUCKING AMAZING!

 

[cave_dweller]

A worldwide survey was conducted by the UN. The only question asked was: 'Would you please give your honest opinion about solutions to the food shortage in the rest of the world ?'

The survey was a huge failure...

In Africa they didn't know what 'food' meant. In Eastern Europe they didn't know what 'honest' meant. In Western Europe they didn't know what 'shortage' meant. In China they didn't know what 'opinion' meant. In the Middle East they didn't know what 'solution' meant. In South America they didn't know what 'please' meant. And in the USA they didn't know what 'the rest of the world' meant