Pro Austerity Economists reverse stance on UK Stimulus/Austerity

[Phokus]

http://krugman.blogs.nytimes.com/2012/08/16/slump-and-circumstance/

http://www.newstatesman.com/blogs/politics/2012/08/exclusive-osbornes-supporters-turn-him

Two and a half years later, the UK is mired in a double-dip recession and Osborne is set to borrow £11.8bn more than Labour planned. For this week's issue of the New Statesman (out tomorrow), we asked the 20 whether they regretted signing the letter and what they would do to stimulate growth. Of those who replied, only one, Albert Marcet of Barcelona Graduate School of Economics, was willing to repeat his endorsement of Osborne. Nine urged the Chancellor to abandon his opposition to fiscal stimulus and to promote growth through tax cuts and higher infrastructure spending, while others merely said "no comment" or were "on holiday".

Bolded part = HAHAHAHAAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA, what cowards.

Austerity doesn't work?

If basic macro-econ 101 were a required high school course, pro-austerity politicians would never get elected.

 

[Jaskalas]

You think the double dip has to do with austerity?

Where do you think our trillion dollar deficits are leading us? Our double dip is next.

 

[Throckmorton]

I don't understand the deficit hawk types. Shouldn't it be obvious that cutting jobs and letting infrastructure fail doesn't help the economy? Paying back debts to the Chinese helps... the Chinese.

 

[Throckmorton]

You think the double dip has to do with austerity?

Where do you think our trillion dollar deficits are leading us? Our double dip is next.

We have a trillion dollar deficit because Republicans intentionally sabotaged the economy.

 

[the DRIZZLE]

So the bad economy is the US is not Obama's fault, but rather is the result of the Euro debt crisis. Meanwhile,the poor economy in England is the result of austerity despite the fact that their economy is far more coupled with Europe then we are. Got it.

 

[the DRIZZLE]

I don't understand the deficit hawk types. Shouldn't it be obvious that cutting jobs and letting infrastructure fail doesn't help the economy? Paying back debts to the Chinese helps... the Chinese.

I like how anytime anyone talks about cutting government, the Keynesians immediately jump on the investment in infrastructure argument. The problem is that investment in infrastructure represents a very small part of the Federal budget and of the stimulus that we've seen over the past few years. If the stimulus bill actually went to real infrastructure (I don't count solar panels) I would not have objected to it. Of course, Keynsian theory makes no distinction between wise and unwise spending, which should tell you something.

 

[StrangerGuy]

I like how anytime anyone talks about cutting government, the Keynesians immediately jump on the investment in infrastructure argument. The problem is that investment in infrastructure represents a very small part of the Federal budget and of the stimulus that we've seen over the past few years. If the stimulus bill actually went to real infrastructure (I don't count solar panels) I would not have objected to it. Of course, Keynsian theory makes no distinction between wise and unwise spending, which should tell you something.

Keynes himself must be rolling in his grave when his "followers" run up budget deficits regardless of whether the economy is booming or in a recession.

 

[Throckmorton]

Keynes himself must be rolling in his grave when his "followers" run up budget deficits regardless of whether the economy is booming or in a recession.

Was George Bush a Keynesian? What did Keynes say about turning surplus into tax cuts and wars?

 

[berzerker60]

So the bad economy is the US is not Obama's fault, but rather is the result of the Euro debt crisis. Meanwhile,the poor economy in England is the result of austerity despite the fact that their economy is far more coupled with Europe then we are. Got it.

No, the bad economy is a result of a huge huge number of factors, but if we're simplifying to a president, I'd say much more Bush than Obama's fault with some Clinton thrown in for good measure. The fact that we're doing better and England is going back into recession is the difference between our stimulus, which was way too small because of Republican opposition but still did a lot of good, and the UK policy of immediate austerity like US Republicans continue to campaign for. Note that the austerity we have followed has been to our detriment - private sector jobs have grown for a long time now, but the huge cuts in public sector jobs have fueled the large unemployment.

When revenues are strong and unemployment is low, Clinton and Bush should have been paying down the debt (and not starting unfunded wars and giving huge tax breaks). When the economy is crashing because a tiny fraction of the country has all the money and won't spend it, so there's no demand to lead to new hiring, is the time when government should be upgrading infrastructure, hiring on workers, etc..

 

[blankslate]

No, the bad economy is a result of a huge huge number of factors, but if we're simplifying to a president, I'd say much more Bush than Obama's fault with some Clinton thrown in for good measure. The fact that we're doing better and England is going back into recession is the difference between our stimulus, which was way too small because of Republican opposition but still did a lot of good, and the UK policy of immediate austerity like US Republicans continue to campaign for. Note that the austerity we have followed has been to our detriment - private sector jobs have grown for a long time now, but the huge cuts in public sector jobs have fueled the large unemployment.

When revenues are strong and unemployment is low, Clinton and Bush should have been paying down the debt (and not starting unfunded wars and giving huge tax breaks). When the economy is crashing because a tiny fraction of the country has all the money and won't spend it, so there's no demand to lead to new hiring, is the time when government should be upgrading infrastructure, hiring on workers, etc..

The thing that is President Clinton's fault here was his signing the repeal of Glass-Steagall and his support for the free trade agreement.

His tax policies were actually sound. President Bush blew those away.

If President Clinton's tax rates were left alone then the situation would still be dire but not as bad.

 

[Matt1970]

It doesn't take a rocket scientist to understand we cannot afford to keep going at this pace. We can put another 5 pages of blame and graphs and partisan crap, or we can do something about it.

 

[MooseNSquirrel]

And that same rocket scientist would tell you you don't undertake austerity measures in the middle of the worst economy in forever.

That given a debt problem trying to solve it by lowering revenue is madness.


But then it doesnt take a rocket scientist.

 

[Matt1970]

And that same rocket scientist would tell you you don't undertake austerity measures in the middle of the worst economy in forever.

That given a debt problem trying to solve it by lowering revenue is madness.


But then it doesnt take a rocket scientist.

Tell that to all the states that had to lower spending.

 

[MooseNSquirrel]

States arent countries with central banks.

 

[Matt1970]

States arent countries with central banks.

Irrelevant.

 

[Doc Savage Fan]

Meanwhile..Democrats think tax increases here in the US is the solution to turning around the economy. Go figure.

 

[MooseNSquirrel]

Irrelevant.

States cant print money.

 

[MooseNSquirrel]

Meanwhile..Democrats think tax increases here in the US is the solution to turning around the economy. Go figure.

Thats a bit of a broad brush,

Many people think that raising taxes at the high end will help narrow the income spending gap and have zero repercussion on the economy, something supported by years of data.

 

[Matt1970]

States cant print money.

Right, so they have no choice but Austerity. Where are all these catastrophic results from the states cutting spending?

 

[Phokus]

Right, so they have no choice but Austerity. Where are all these catastrophic results from the states cutting spending?

The federal government picked up some of the slack for the states via stimulus. Unfortunately, the federal government didn't pick up enough slack.

 

[berzerker60]

Right, so they have no choice but Austerity. Where are all these catastrophic results from the states cutting spending?

Much higher unemployment, meaning lower demand for goods which would drive more hiring in the private sector, for one:
http://thinkprogress.org/economy/2012/06/01/493669/public-sector-reagan-unemployment/?mobile=nc

Also, the results aren't always flashy or immediate, but that doesn't make them any less real. Underfunded universities means higher tuition (meaning greater student debt), and longer time-to-graduation because of reduced class offerings meaning more semesters of tuition/debt. Underfunded primary schools impact us all as students get worse educations and can't find good jobs. Roads and bridges need replacing in a certain time frame, but they don't just collapse when they hit that date, they just continue to crumble, making them unsafe and causing more car maintenance for everyone. Longer lines at the DMV eat into worker productivity, etc.

 

[Anarchist420]

Was George Bush a Keynesian?

Hell yeah.

What did Keynes say about turning surplus into tax cuts and wars?

If you're thinking Clinton left a surplus then you're wrong. I don't know whether you were thinking that though, so sorry if you already knew that Clinton didn't leave Bush a surplus

 

[chucky2]

What do the 20 year numbers look like?

 

[berzerker60]

What do the 20 year numbers look like?

I'll tell you in 20 years (?)

 

[MooseNSquirrel]

Right, so they have no choice but Austerity. Where are all these catastrophic results from the states cutting spending?

Let me Google that for you.

This is not a serious discussion.