The economic framework for austerity is getting even weaker

[fskimospy]

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

No, I've quite clearly mentioned them both in the past. Generally spending cuts are what come up as austerity measures here because the extreme right won't even consider tax increases.

 

[Doc Savage Fan]

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.

I think it depends on whether or not you want to fix the problem on a long-term basis or not. Latvia, Estonia and Lithuania implemented significant austerity measures that hurt short-term but paid off long-term. Here are 3 real world examples where austerity worked.

Latvia, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.LV.BP_EXTD.PGDP.4F_N

Estonia, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.EE.BP_EXTD.PGDP.4F_N

Lithuania, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.LT.BP_EXTD.PGDP.4F_N

 

[Matt1970]

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.

You are going to go with a projection? We know thos are always right on the mark aren't they?

 

[Matt1970]

No, I've quite clearly mentioned them both in the past. Generally spending cuts are what come up as austerity measures here because the extreme right won't even consider tax increases.

Really? The right went with the tax increases. When a miniscule spending cut was put in place the left went on the doom and gloom tour. Nice try pal.

 

[fskimospy]

Really? We right went with the tax increases. When a miniscule spending cut was put in place the left went on the doom and gloom tour. Nice try pal.

You mean you went a tax cut that was smaller than you wanted. Nice try, pal.

 

[Matt1970]

You mean you went a tax cut that was smaller than you wanted. Nice try, pal.

I fixed it.

 

[Phokus]

I'm flabbergasted that any self respecting economist would be doing their models in Excel and not something like STATA. These mistakes gave ammunition to rightwing schills like Ryan and no doubt some idiot conservatives in these forums.

Also, another big mistake they made is not separating out countries that were on the gold standard (and also the Euro, which acts like a gold standard) which probably had a bigger negative effect on their economies than any fiscal spending policies.

This is a big story over at reddit's econ subreddit and Rheinhart/Rogoff are getting absolutely hammered by other economists trying to duplicate their work:

http://www.reddit.com/r/Economics/

Yet another black eye for conservatives.

YOUR ECONOMIC POLICIES DO NOT WORK YOU IDIOTS

 

[Matt1970]

I'm flabbergasted that any self respecting economist would be doing their models in Excel and not something like STATA. These mistakes gave ammunition to rightwing schills like Ryan and no doubt some idiot conservatives in these forums.

Also, another big mistake they made is not separating out countries that were on the gold standard (and also the Euro, which acts like a gold standard) which probably had a bigger negative effect on their economies than any fiscal spending policies.

This is a big story over at reddit's econ subreddit and Rheinhart/Rogoff are getting absolutely hammered by other economists trying to duplicate their work:

http://www.reddit.com/r/Economics/

Yet another black eye for conservatives.

YOUR ECONOMIC POLICIES DO NOT WORK YOU IDIOTS

Are these the same economists that said the Obama Stimulus will keep us under 8% unemployment? Maybe bigger font will make your opinion correct. Phokus reply insulting me in 3....2....1....

 

[Doc Savage Fan]

I'm flabbergasted that any self respecting economist would be doing their models in Excel and not something like STATA. These mistakes gave ammunition to rightwing schills like Ryan and no doubt some idiot conservatives in these forums.

Also, another big mistake they made is not separating out countries that were on the gold standard (and also the Euro, which acts like a gold standard) which probably had a bigger negative effect on their economies than any fiscal spending policies.

This is a big story over at reddit's econ subreddit and Rheinhart/Rogoff are getting absolutely hammered by other economists trying to duplicate their work:

http://www.reddit.com/r/Economics/

Yet another black eye for conservatives.

YOUR ECONOMIC POLICIES DO NOT WORK YOU IDIOTS

I gave 3 examples of successful austerity programs in Post #102. You really should think twice before calling anybody an idiot.

 

[mect]

Response by Reinhart et al for those interested:
http://blogs.wsj.com/economics/2013/04/17/reinhart-rogoff-admit-excel-mistake-rebut-other-critiques/
Summary, the excel mistake was a mistake, and caused error in one of the figures, but not the overall conclusions of the paper. The reason certain countries were left off during certain years was due to the fact that the information was either not available or not thoroughly vetted. There was no systematic removal of data. The weighting used was a standard method used to prevent data sets from being dominated by individual countries that spend an abnormal amount of time in a single category. For example, you don't want Greece to dominate the high debt category because they have spent so much time with high debt because there may be other complicating factors specific to Greece.

 

[fskimospy]

I gave 3 examples of successful austerity programs in Post #102. You really should think twice before calling anybody an idiot.

You might want to check their unemployment rate and real GDP historical charts before you label them as successful.

What I find sad is that those countries are literally the best it gets for austerity. That's pretty shameful.

 

[Incorruptible]

Are these the same economists that said the Obama Stimulus will keep us under 8% unemployment? Maybe bigger font will make your opinion correct. Phokus reply insulting me in 3....2....1....

phokus is an idiot. All he can do is hurl insults at people whenever he is wrong.

 

[Matt1970]

I think I am going to have to go with Obama as far as the debt is concerned.

We cannot, and will not, sustain deficits like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation.

We are paying the price for these deficits right now. In 2008 alone, we paid $250 billion in interest on our debt -- one in every 10 taxpayer dollars. That is more than three times what we spent on education that year; more than seven times what we spent on VA health care.

So if we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road as our interest payments rise, our obligations come due, confidence in our economy erodes, and our children and our grandchildren are unable to pursue their dreams because they're saddled with our debts.

And that's why today I'm pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we've long neglected. But I refuse to leave our children with a debt that they cannot repay -- and that means taking responsibility right now, in this administration, for getting our spending under control.

http://www.youtube.com/watch?v=SaQUU2ZL6D8

 

[Doc Savage Fan]

You might want to check their unemployment rate and real GDP historical charts before you label them as successful.

What I find sad is that those countries are literally the best it gets for austerity. That's pretty shameful.

I would appreciate it if you would post your evidence as well as more detailed reasoning as to why you feel their austerity efforts were unsuccessful or less than successful. What do you think the outcome would be had they taken a deficit spending stimulus approach?

 

[Phokus]

I gave 3 examples of successful austerity programs in Post #102. You really should think twice before calling anybody an idiot.

Yes, you're an idiot, the study in question studied very long time frames over very many countries, you do not use 3 'examples' over a short time period to 'prove your point', good lord, the rightwing stupidity is out in full force today. Also, Lithuania, Estonia, and Latvia? Might as throw in Micronesia and Tonga as well. You people are so god damned embarrassing.

 

[Doc Savage Fan]

phokus is an idiot. All he can do is hurl insults at people whenever he is wrong.

You call everybody an idiot...you are no better. Please just do us all a favor and STFU.

 

[fskimospy]

I would appreciate it if you would post your evidence as well as more detailed reasoning as to why you feel their austerity efforts were unsuccessful or less than successful had they taken a deficit spending stimulus approach.

I'm on my phone right now so I can't, but ill do it later. The numbers are ugly. I would imagine one reason why you or others posted the growth rate is that it helps disguise the catastrophic decline in GDP that came from these programs.

Like I said, that is what they call "success". Failure is even more horrifying.

 

[Matt1970]

You call everybody an idiot...you are no better. Please just do us all a favor and STFU.

That's all he really has. In his mind everyone is an idiot.

 

[Incorruptible]

You call everybody an idiot...you are no better. Please just do us all a favor and STFU.

Only those who wish to violate my liberty. If someone wants to restrict my freedom then I will call them out.

 

[thraashman]

I think I am going to have to go with Obama as far as the debt is concerned.



http://www.youtube.com/watch?v=SaQUU2ZL6D8

The problem with austerity isn't that debt is good or deficits are fine. When Obama made those comments we were in an economy that could sustain austerity measures. When the economy is contracting or stagnant, instituting policies that remove money from the economy can only hurt it.

I would appreciate it if you would post your evidence as well as more detailed reasoning as to why you feel their austerity efforts were unsuccessful or less than successful. What do you think the outcome would be had they taken a deficit spending stimulus approach?

Um I think that the fastest loss of jobs in the history of the nation and one of the worst economic collapses we've ever seen would have slowed and then reversed to the point where growth began and the private sector would have added jobs for 40 straight months instead of losing 800k a month... Oh wait, that's what DID happen when we did a deficit stimulus. I don't know what would have happened in other countries such as Spain where with austerity unemployment reached 26%.

 

[Doc Savage Fan]

Yes, you're an idiot, the study in question studied very long time frames over very many countries, you do not use 3 'examples' over a short time period to 'prove your point', good lord, the rightwing stupidity is out in full force today. Also, Lithuania, Estonia, and Latvia? Might as throw in Micronesia and Tonga as well. You people are so god damned embarrassing.

I agree that I'm an idiot...an idiot for thinking that you're actually capable of civil and intelligent discussion.

I really don't get you...you're obviously halfway intelligent...but apparently not intelligent enough to realize how irrational you've become apparently due to all that seething anger inside you. You really should seek help...or at least think about what I'm saying for more than 2 seconds.

 

[First]

I think it depends on whether or not you want to fix the problem on a long-term basis or not. Latvia, Estonia and Lithuania implemented significant austerity measures that hurt short-term but paid off long-term. Here are 3 real world examples where austerity worked.

Latvia, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.LV.BP_EXTD.PGDP.4F_N

Estonia, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.EE.BP_EXTD.PGDP.4F_N

Lithuania, Gross external debt, Percentage of GDP - ECB, Neither seasonally or working day adjusted
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=118.DD.Q.LT.BP_EXTD.PGDP.4F_N

I can't tell if you read the charts carefully or not here. What is the aggregate negative GDP from those Baltic nation's austerity measures, and the aggregate positive GDP after the recovery? Did you notice the sum you get? Please tell me you noticed it, and please let me know if you consider the aggregate end result (i.e. massively negative GDP growth when combining the downturn and recovery) as acceptable.

 

[werepossum]

The problem with austerity isn't that debt is good or deficits are fine. When Obama made those comments we were in an economy that could sustain austerity measures. When the economy is contracting or stagnant, instituting policies that remove money from the economy can only hurt it.


Um I think that the fastest loss of jobs in the history of the nation and one of the worst economic collapses we've ever seen would have slowed and then reversed to the point where growth began and the private sector would have added jobs for 40 straight months instead of losing 800k a month... Oh wait, that's what DID happen when we did a deficit stimulus. I don't know what would have happened in other countries such as Spain where with austerity unemployment reached 26%.

Funny, I seem to remember proggies screaming that Bush's deficit spending was dooming our nation right up to the point they began screaming that the right preventing Obama from running even bigger deficits than we already were (which in turn were much larger than Bush's deficits) were dooming our nation. Before that it was the Republican Congress' budgets which were dooming the nation by preventing Clinton from making the kind of "investments" our nation needs to make in good times.

Perhaps we could at least get one consistent ruling from you guys as to whether Obama has fixed the economy or the economy is stagnant.

 

[Matt1970]

The problem with austerity isn't that debt is good or deficits are fine. When Obama made those comments we were in an economy that could sustain austerity measures. When the economy is contracting or stagnant, instituting policies that remove money from the economy can only hurt it.

Those comments were made in Feb 2009.

 

[Matt1970]

Funny, I seem to remember proggies screaming that Bush's deficit spending was dooming our nation right up to the point they began screaming that the right preventing Obama from running even bigger deficits than we already were (which in turn were much larger than Bush's deficits) were dooming our nation. Before that it was the Republican Congress' budgets which were dooming the nation by preventing Clinton from making the kind of "investments" our nation needs to make in good times.

Perhaps we could at least get one consistent ruling from you guys as to whether Obama has fixed the economy or the economy is stagnant.

Yep, remember $4 trillion debt in 8 years is unpatriotic.

http://www.youtube.com/watch?v=DyLmru6no4U