The economic framework for austerity is getting even weaker

[Doc Savage Fan]

Public debt as a percentage of GDP is going the wrong direction in a big hurry. One might complain about the possible impact of austerity programs on economies...but it's kind of odd that there's no mention of how tax increases adversely affect economic growth, investment, productivity and labor force participation. To me, it appears that a lot of liberals are talking out of both sides of their mouth when they advocate tax increases on one hand and demonize spending cuts on the other.

 

[nehalem256]

No, I have said that austerity has hurt economic growth.

The US has engaged in austerity, but less than Europe has.

So that would seem to argue that the "correct" amount of austerity does not harm things. Just like you argued that the "correct" amount of government deficits would make things better.

And as far as hurting economic growth. That would depend your definition of growth. I mean the government could borrow a bunch of money and dump it out of helicopters and people might then spend it (on crap from China), but that would be basically illusory economic growth. When the helicopters run out of money RIP growth.

Private sector growth in the face of government austerity would seem to be real sustainable economic growth.

Had the US pursued more sensible fiscal policy our economy would be in better shape and our long term deficits would be lower.

Except you already stated we had a near unprecedented decline in the deficit with austerity. It not just that the deficit is lower its that it has declined at rate you called unprecedented that show that austerity is not the scourge you think it is.

 

[fskimospy]

So that would seem to argue that the "correct" amount of austerity does not harm things. Just like you argued that the "correct" amount of government deficits would make things better.

And as far as hurting economic growth. That would depend your definition of growth. I mean the government could borrow a bunch of money and dump it out of helicopters and people might then spend it (on crap from China), but that would be basically illusory economic growth. When the helicopters run out of money RIP growth.

Private sector growth in the face of government austerity would seem to be real sustainable economic growth.

Yes, the question is always the right amount of deficit spending. It should have been more.

Except you already stated we had a near unprecedented decline in the deficit with austerity. It not just that the deficit is lower its that it has declined at rate you called unprecedented that show that austerity is not the scourge you think it is.

The decline in our deficit has more to do with GDP growth than anything else. Growth in tax receipts due to GDP growth is not generally understood as austerity. I was actually trying to show that the US had massively reduced its deficit in recent years, not that the US was engaging in big time austerity during that time.

Starting this year we are engaging in big time austerity. If you haven't noticed, once this austerity started to hit our job growth and GDP growth has tanked; this will make future deficit/GDP ratios worse than they needed to be. Now that we have decreased deficit spending so significantly we are going to lose a lot of the economic growth part.

It's pure foolishness.

 

[fskimospy]

Public debt as a percentage of GDP is going the wrong direction in a big hurry. One might complain about the possible impact of austerity programs on economies...but it's kind of odd that there's no mention of how tax increases adversely affect economic growth, investment, productivity and labor force participation. To me, it appears that a lot of liberals are talking out of both sides of their mouth when they advocate tax increases on one hand and demonize spending cuts on the other.

As for 'no mention' of what tax increases do, that's of course false; tax increases are austerity the same as spending cuts are. I remember in a previous thread you tried to ignore tax increases as austerity.

What liberals argue for is deficit spending now and austerity later. Part of the austerity necessary to close the deficit should come through tax increases.

 

[Doc Savage Fan]

As for 'no mention' of what tax increases do, that's of course false; tax increases are austerity the same as spending cuts are. I remember in a previous thread you tried to ignore tax increases as austerity.

What liberals argue for is deficit spending now and austerity later. Part of the austerity necessary to close the deficit should come through tax increases.

Liberals are constantly advocating tax increases which you admit are indeed austerity. How do liberals rationalize their point that austerity measures should come later especially when they are advocating huge tax increases now?

 

[nehalem256]

The decline in our deficit has more to do with GDP growth than anything else. Growth in tax receipts due to GDP growth is not generally understood as austerity. I was actually trying to show that the US had massively reduced its deficit in recent years, not that the US was engaging in big time austerity during that time.

Starting this year we are engaging in big time austerity. If you haven't noticed, once this austerity started to hit our job growth and GDP growth has tanked; this will make future deficit/GDP ratios worse than they needed to be. Now that we have decreased deficit spending so significantly we are going to lose a lot of the economic growth part.

It's pure foolishness.

I see no discernible pattern.

As for 2013

http://www.huffingtonpost.com/2013/04/05/march-jobs-report-unemployment-rate_n_3019564.html

U.S. employers hired at the slowest pace in nearly a year in March, adding only 88,000 jobs to non-farm payrolls, with steep job cuts in the retail and government sectors, including 12,000 at the U.S. Postal Service,

Non-farm payrolls have grown by 504,000 jobs in the first three months of the year, or 168,000 per month, just enough to keep up with the natural growth of the labor force and keep unemployment from rising. February's top-line number was revised up to 268,000. Together, revisions to January and February added 61,000 jobs -- the one thin silver lining in an otherwise dismal report.

Where is your evidence of tanking job growth?

 

[nehalem256]

Liberals are constantly advocating tax increases which you admit are indeed austerity. How do liberals rationalize their point that austerity measures should come later especially when they are advocating huge tax increases now?

Not just advocating. But insisting on tax increases for the rich.

 

[Matt1970]

We already have close to $1 Trillion in trade deficits. Wait till we are sending that much overseas in interest payments on the debt as well. Things will be real good then won't they?

 

[glenn1]

Yes, the question is always the right amount of deficit spending. It should have been more.



The decline in our deficit has more to do with GDP growth than anything else. Growth in tax receipts due to GDP growth is not generally understood as austerity. I was actually trying to show that the US had massively reduced its deficit in recent years, not that the US was engaging in big time austerity during that time.

Starting this year we are engaging in big time austerity. If you haven't noticed, once this austerity started to hit our job growth and GDP growth has tanked; this will make future deficit/GDP ratios worse than they needed to be. Now that we have decreased deficit spending so significantly we are going to lose a lot of the economic growth part.

It's pure foolishness.

I thought the entire point of stimulus growth was to "borrow" growth from the future to smooth out a current "rough spot" in the economy. Now you're claiming that stimulus helps both current growth and future growth?

 

[fskimospy]

Where is your evidence of tanking job growth?

My evidence of tanking job growth would be... basically the quote you just provided.

 

[Matt1970]

The decline in our deficit has more to do with GDP growth than anything else. Growth in tax receipts due to GDP growth is not generally understood as austerity. I was actually trying to show that the US had massively reduced its deficit in recent years, not that the US was engaging in big time austerity during that time.

Starting this year we are engaging in big time austerity. If you haven't noticed, once this austerity started to hit our job growth and GDP growth has tanked; this will make future deficit/GDP ratios worse than they needed to be. Now that we have decreased deficit spending so significantly we are going to lose a lot of the economic growth part.

It's pure foolishness.

We have massively reduced our deficit in recent years ? LOLOLOLOLOL

 

[fskimospy]

I thought the entire point of stimulus growth was to "borrow" growth from the future to smooth out a current "rough spot" in the economy. Now you're claiming that stimulus helps both current growth and future growth?

Increasing debt to GDP ratio has a mild negative correlation with growth in the future.

The problem with austerity in an extremely depressed economy is that it depresses the economy still further, thus causing GDP contraction and lowering tax receipts. My argument against austerity is in three parts. One is that debt is not nearly as bad long term as austerians argue, two is that massive unemployment has very real long term social and economic competitiveness costs, and three is that austerity actually makes long term debt worse due to GDP contraction. It is self defeating.

If Europe hasn't taught you guys the absolute foolishness of austerity I don't know what will.

 

[fskimospy]

We have massively reduced our deficit in recent years ? LOLOLOLOLOL

Is there a reason why you use a chart in which the most recent data is from 2010 in order to try and make a statement about what has happened in recent years?

Do you chuckleheads even read what you post?

 

[Incorruptible]

Increasing debt to GDP ratio has a mild negative correlation with growth in the future.

The problem with austerity in an extremely depressed economy is that it depresses the economy still further, thus causing GDP contraction and lowering tax receipts. My argument against austerity is in three parts. One is that debt is not nearly as bad long term as austerians argue, two is that massive unemployment has very real long term social and economic competitiveness costs, and three is that austerity actually makes long term debt worse due to GDP contraction. It is self defeating.

If Europe hasn't taught you guys the absolute foolishness of austerity I don't know what will.

And this why you are wrong. Europe hasn't had any "austerity" and in many cases there were no real spending cuts along with tax increases. The same idiots that believe this are the same ones that believe the financial crash was caused by Capitalism.

 

[fskimospy]

And this why you are wrong. Europe hasn't had any "austerity" and in many cases there were no real spending cuts along with tax increases. The same idiots that believe this are the same ones that believe the financial crash was caused by Capitalism.

Professional economists and policy analysts disagree with you.

 

[Incorruptible]

Professional economists and policy analysts disagree with you.

Europe isn't under austerity. And were these same professional economists and policy analysts able to even predict the financial crash?

 

[fskimospy]

Europe isn't under austerity. And were these same professional economists and policy analysts able to even predict the financial crash?

Europe is unarguably under austerity.

You don't have any idea what you're talking about, and you're either a troll or a moron. I'm not going back and forth with you.

 

[Incorruptible]

Europe is unarguably under austerity.

You don't have any idea what you're talking about, and you're either a troll or a moron. I'm not going back and forth with you.

You are most likely a moron and you would prefer to run away because I disagree with you.

An excellent article explaining the austerity myth
http://www.forbes.com/sites/danielm...ul-krugman-and-the-european-austerity-myth/2/

 

[fskimospy]

You are most likely a moron and you would prefer to run away because I disagree with you.

An excellent article explaining the austerity myth
http://www.forbes.com/sites/danielm...ul-krugman-and-the-european-austerity-myth/2/

lol. Your article supports my point that Europe has engaged in austerity.

That's the second person on this page who has shown that they don't even read the shit they post.

 

[Matt1970]

Is there a reason why you use a chart in which the most recent data is from 2010 in order to try and make a statement about what has happened in recent years?

Do you chuckleheads even read what you post?

Do you really think having 2011 and 12 data would help your cause? Here you go. Sure looks like massively reduced deficits to me.

 

[fskimospy]

Do you really think having 2011 and 12 data would help your cause?

Why don't you go dig up a more current chart and find out for yourself. You might learn something.

 

[Incorruptible]

lol. Your article supports my point that Europe has engaged in austerity.

That's the second person on this page who has shown that they don't even read the shit they post.

The article shows that the countries didn't cut spending.

 

[Matt1970]

As for 'no mention' of what tax increases do, that's of course false; tax increases are austerity the same as spending cuts are. I remember in a previous thread you tried to ignore tax increases as austerity.

What liberals argue for is deficit spending now and austerity later. Part of the austerity necessary to close the deficit should come through tax increases.

And yet you only seem to complain about cuts in spending when complaining about austerity.

 

[fskimospy]

Do you really think having 2011 and 12 data would help your cause? Here you go. Sure looks like massively reduced deficits to me.

Your chart shows the deficit going from ~10% of GDP in 2009 to ~5% of GDP this year. So yes, cutting the deficit in half counts as massively reduced deficits to me.

Aren't you glad you got some better data? You probably feel awfully foolish for that last chart now.

 

[zephyrprime]

I have no doubt that having a high debt load kills your growth rate. However, I also have no doubt that austerity kills growth as well. If I had to choose between the two, I would say austerity kills growth more in most circumstances. However, once the debt level get's sufficiently high, it causes a huge crisis which causes much more damage than austerity.

So both austerity and high debt are bad. Fortunately, those aren't the only two choices. Unfortunately, no one seems to realize this and the banks will prevent any third options from being utilized.