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(The New York Times) Obvious Europe has tried austerity measures to spend less and grow the economy. Did it work? Anyone? Anyone know the effects?   (nytimes.com) divider line 228
More: Obvious, John Maynard Keynes, austerity, Joint Economic Committee, obama stimulus, keynesian, recessions, treasury securities  
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2712 clicks; posted to Politics » on 30 Dec 2011 at 11:44 AM   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»   |    Get this fabulous T-Shirt and impress the methane out of your friends! shirt it!



228 Comments   (+0 »)
   
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WTF Indeed
2011-12-30 10:03:09 AM
netrightdaily.com
 
GAT_00 [TotalFark]
2011-12-30 10:06:38 AM
Republicans everywhere stick their fingers in their ears to keep out the awful facts.
 
coco ebert [TotalFark]
2011-12-30 10:10:21 AM
Austerity in the developing countries in the '80s and '90s under the guise of "structural adjustment" largely made those countries poorer (well, except for a certain class of people). So now Europe gets to see how it feels. Sucks, don't it?
 
The Stealth Hippopotamus [TotalFark]
2011-12-30 10:26:28 AM
GAT_00: Republicans everywhere stick their fingers in their ears to keep out the awful facts.

Dont worry about it. Everyone knows that you have to wait at least three years. Up until that point it's all the other guy's fault.
 
hillbillypharmacist [TotalFark]
2011-12-30 10:27:20 AM
They just weren't austere enough. Take it to its extreme: if no one spends any money, think the wealth everyone will have!
 
keylock71 [TotalFark]
2011-12-30 10:29:13 AM
I love how "austerity" is just a gentle way of saying the poor and middle classes must pay for the excesses, mismanagement and crimes of the wealthy and powerful elite... and God help you if you dare suggest the wealthiest citizens should be equally effected by austerity measures.
 
Hobodeluxe
2011-12-30 10:29:16 AM
what do you think will happen when you take money out of an economy? or concentrate it in the hands of a few who move it out of the country?
 
mitchcumstein1 [TotalFark]
2011-12-30 10:43:26 AM
It did not work, and the United States sank deeper into the Great Depression?
 
I_C_Weener [TotalFark]
2011-12-30 10:46:40 AM
Sometimes you have nothing left to use for stimulation.
 
Grand_Moff_Joseph [TotalFark]
2011-12-30 10:52:45 AM
Part of the driving force behind the ridiculous push for ultra-austerity is that the political class (and by extension the public) has sold themselves on the analogy that federal/global economic issues are no different than a household budget. Everyone thinks 'well, when times get tough, families shut the wallet, so the governments of the world should too'. Reducing expenditures (esp. unneeded ones) makes sense, and is never a bad thing to continually work at, even in good times. But to quote the afflaughable Herman Cain, this is "apples and oranges". Government budgets on any scale are exponentially more complex than a family's finances, and cannot be operated in the same manner, regardless of the circumstances.

Even if they could, then the same people who drank the austerity Kool-Aid refuse to acknowledge the other half of the family budget analogy: In addition to cutting expenses, when times are tough, families do whatever they can to bring in more money.
 
keylock71 [TotalFark]
2011-12-30 10:56:55 AM
I_C_Weener: Sometimes you have nothing left to use for stimulation.

Nonsense... You obviously have an internet connection. You can find every manner of stimulation there and not run out for a thousand lifetimes.
 
DarthBrooks [TotalFark]
2011-12-30 11:11:03 AM
Thatcher was right. They finally ran out of other people's money.
 
A Fark Handle
2011-12-30 11:44:51 AM
nope, of course not...we all knew this. austerity has always been an open lie. europe isn't exactly the first time this bullshiat failed. eastern block, asian tigers, etc. funny how the big banks always win during austerity...
 
vernonFL [TotalFark]
2011-12-30 11:46:22 AM
Keynes Was Right

By PAUL KRUGMAN

Shocker. Never saw that one coming.

www.visualphotos.com
 
bhcompy
2011-12-30 11:50:51 AM
Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?
 
Knight of the Woeful Countenance
2011-12-30 11:54:36 AM
I_C_Weener: Sometimes you have nothing left to use for stimulation.

Know how I know you know absolutely nothing about Macroeconomics.

I get annoyed by a lot of things about the Republican mindset, but the refusal to acknowledge the difference between personal finance microeconomics and how countries actually run a modern structured economy really grinds my gears.
 
CygnusDarius [TotalFark]
2011-12-30 11:54:52 AM
Here's the thing, why the American Right wing so farking happy when the European Union fails?.
 
Mrbogey
2011-12-30 11:56:19 AM
Krugman didn't actually make an argument in as much as he insisted he was right.

I figured he'd at least make a fallacious argument from econometrics. You know, the kind where you throw out numbers that a gov't manipulates through spending to prove health. Never mind that numbers alone are meant to give you an idea and not become the idea. That by cutting the oil sensor you're not eliminating the low oil pressure warning.

This was just laziness on Krugmans part.
 
Mrbogey
2011-12-30 11:57:49 AM
Sorry that was meant to be "you're not eliminating the low oil pressure. Just the low oil pressure warning."
 
HellRaisingHoosier
2011-12-30 12:00:11 PM
I say we just do what we did to get out of the first Depression. Then again, I'm not economist, so I don't know if we can do the New Deal again.

We have a saying here: "Don't fix what ain't broken."

If we know of a method that works, lets at least give it a real shot, yea?
 
qorkfiend
2011-12-30 12:00:24 PM
bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Actually, Bill Clinton (and by accident, George W. Bush) did follow the counter-cyclical spending model. Balanced budget, welfare reform, tax increases, all during the dot-com boom, which aided George W. Bush's efforts to ease the recession immediately following 9/11. There was no continuation of the cycle when the economy started to grow again, though; spending was massively increased in the form of the Iraq war instead of shrunk as recommended by Keynes.
 
Dr Dreidel
2011-12-30 12:00:48 PM
CygnusDarius: Here's the thing, why the American Right wing so farking happy when the European Union fails?.

Because it means Socialism sucks.

The GOP has shown time and again that they'll cut off their noses to spite their faces, why should the world economy be any different?
 
bugontherug
2011-12-30 12:04:16 PM
bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Nope. Government spending as a percentage of GDP declined beginning in the early 90's, and continuing until Bush took over.

And yes, many on the left were deficit hawking during the Bush years, as we should have been. Unfortunately, Bush supporters were silent on the deficit then. They only became concerned about it again when a black man became president, and the time was actually right for large scale deficit spending.
 
imashark
2011-12-30 12:05:02 PM
vernonFL: Keynes Was Right

By PAUL KRUGMAN

Shocker. Never saw that one coming.

[www.visualphotos.com image 640x445]

Fitting that you would use a fossil to show your disdain.
 
monoski
2011-12-30 12:05:58 PM
GAT_00: Republicans everywhere stick their fingers in their ears to keep out the awful facts.

Michelle Bachmann has an answer for you; when facts do not feel right you should trust your feelings.
 
Wicked Chinchilla
2011-12-30 12:07:46 PM
qorkfiend: bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Actually, Bill Clinton (and by accident, George W. Bush) did follow the counter-cyclical spending model. Balanced budget, welfare reform, tax increases, all during the dot-com boom, which aided George W. Bush's efforts to ease the recession immediately following 9/11. There was no continuation of the cycle when the economy started to grow again, though; spending was massively increased in the form of the Iraq war instead of shrunk as recommended by Keynes.

Not to mention a massive military base closure program, hiring freezes, etc.
 
LawrencePerson
2011-12-30 12:07:59 PM
Europe tried "austerity" in the sense sense that a 300 pound man skipped lunch, didn't see any weight loss, and went back to double-bacon cheeseburgers for dinner.

As long as Europe has deficit spending to support their cradle-to-grave welfare state despite crashing demographics, they're not implementing any meaningful reform or austerity, and are indeed farked. That's not the captain turning the hip around, it's just him instructing the band to play louder to make it harder to hear the approaching falls...
 
qorkfiend
2011-12-30 12:08:29 PM
Dr Dreidel: CygnusDarius: Here's the thing, why the American Right wing so farking happy when the European Union fails?.

Because it means Socialism sucks.

The GOP has shown time and again that they'll cut off their noses to spite their faces, why should the world economy be any different?

But if Socialism sucks, and austerity sucks, then the only option is welfare-state capitalism!
 
Larofeticus
2011-12-30 12:08:37 PM
False dichotomy.

Frame the argument as: "Should the government spend more money or less money?"

Ignore that the actual problem was caused when the government borrowed too much money in the past which can never be repaid.

The solution to the problem is default.

Austerity punishes the citizens and saves the rich who bought those worthless bonds.

Default properly punishes everyone who was dumb enough to have faith in the good financial judgement of a government.
 
Corvus
2011-12-30 12:09:45 PM
No, it made a bad situation much worse. They turned the Greece debt crisis which they should of just let default and turned it into a full financial crisis of the entire of Europe. Japan did the same thing in years ago.
 
soy_bomb
2011-12-30 12:09:59 PM
Oh an article by noted Enron advisor Paul Krugman. Never mind...

/the reason there are European countries in dire financial straits is due to their massive government over-spending prior to the austerity measures
 
Corvus
2011-12-30 12:11:57 PM
Larofeticus: Default properly punishes everyone who was dumb enough to have faith in the good financial judgement of a government.

exactly. They are having the poor people pay to save those who invested foolishly.
 
bugontherug
2011-12-30 12:13:09 PM
Larofeticus: False dichotomy.

Frame the argument as: "Should the government spend more money or less money?"

Ignore that the actual problem was caused when the government borrowed too much money in the past which can never be repaid.

The solution to the problem is default.

Austerity punishes the citizens and saves the rich who bought those worthless bonds.

Default properly punishes everyone who was dumb enough to have faith in the good financial judgement of a government.

The Canadian government is doing just fine, and Canada avoided the financial collapse the US and much of the rest of the world suffered. I think the conservative government has engaged in deficit spending to stabilize things, but the depth and breadth of the downturn in Canada is nothing like it is in the United States.

It's not "government's" financial judgment that's questionable. It's the financial judgment of a particular party with a stated agenda to sabotage government with "starve the beast" deficit spending during good times and bad.
 
Corvus
2011-12-30 12:13:26 PM
soy_bomb: Oh an article by noted Enron advisor Paul Krugman. Never mind...

/the reason there are European countries in dire financial straits is due to their massive government over-spending prior to the austerity measures

You mean like irelands low tax rates for corporations? Opppsss

Actually most of Europe wasn't doing bad before the austerity measures. but keep repeating your BS untrue talking points.
 
bhcompy
2011-12-30 12:13:40 PM
qorkfiend: bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Actually, Bill Clinton (and by accident, George W. Bush) did follow the counter-cyclical spending model. Balanced budget, welfare reform, tax increases, all during the dot-com boom, which aided George W. Bush's efforts to ease the recession immediately following 9/11. There was no continuation of the cycle when the economy started to grow again, though; spending was massively increased in the form of the Iraq war instead of shrunk as recommended by Keynes.

It's worth noting that the budget never stopped growing. Revenues grew faster than the budget for a few years, until the next recession. I don't know if I would call that what you called it(counter-cyclical spending model) simply because they didn't reduce spending. It still increased.
 
max_pooper
2011-12-30 12:13:48 PM
soy_bomb: Oh an article by noted Enron advisor Paul Krugman. Never mind...

/the reason there are European countries in dire financial straits is due to their massive government over-spending failure to collect enough taxes to cover outlays prior to the austerity measures

Tax evasion is the national sport in Greece.

Republican logic: since the wealthy failed to pay their fair share during the boom so of course they should not bear any financial burden during the bust.
 
soy_bomb
2011-12-30 12:14:44 PM
Obligatory...
Round 1 (new window)
Round 2 (new window)
 
Corvus
2011-12-30 12:14:54 PM
soy_bomb: Oh an article by noted Enron advisor Paul Krugman. Never mind...

/the reason there are European countries in dire financial straits is due to their massive government over-spending prior to the austerity measures

So then why is the US with more conservative policies than most of Europe doing so much worse than a much much more socialized country then say Germany?

Oh I forget you can't respond if you don't have talking points to repeat.
 
cameroncrazy1984 [TotalFark]
2011-12-30 12:16:01 PM
soy_bomb: Obligatory...
Round 1 (new window)
Round 2 (new window)

Yes, don't respond to your talking point debunking, just post youtube videos! That'll show 'em!
 
Corvus
2011-12-30 12:16:12 PM
GOP: Greece = ALL EUROPE!

Hurrr!

Funny they don't speak about the 1 Billion annually in taxes that are not paid in their arguments. I wonder why.
 
monoski
2011-12-30 12:16:33 PM
Corvus: /the reason there are European countries in dire financial straits is due to their massive government over-spending prior to the austerity measures

You mean like irelands low tax rates for corporations? Opppsss

Lets not leave out Greece's systematic blind-eye to tax evasion.
 
bugontherug
2011-12-30 12:16:55 PM
bhcompy: qorkfiend: bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Actually, Bill Clinton (and by accident, George W. Bush) did follow the counter-cyclical spending model. Balanced budget, welfare reform, tax increases, all during the dot-com boom, which aided George W. Bush's efforts to ease the recession immediately following 9/11. There was no continuation of the cycle when the economy started to grow again, though; spending was massively increased in the form of the Iraq war instead of shrunk as recommended by Keynes.

It's worth noting that the budget never stopped growing. Revenues grew faster than the budget for a few years, until the next recession. I don't know if I would call that what you called it(counter-cyclical spending model) simply because they didn't reduce spending. It still increased.

Those are not inflation adjusted figures, so they're almost meaningless. The reason the % of GDP figure is better is because 1) it has a built in inflation adjustment, and 2) they track spending relative to ability to pay for it.
 
soy_bomb
2011-12-30 12:17:43 PM
Corvus: GOP: Greece = ALL EUROPE!
Hurrr!
Funny they don't speak about the 1 Billion annually in taxes that are not paid in their arguments. I wonder why.

Yes lets not talk about Spain and Italy.
 
bugontherug
2011-12-30 12:17:51 PM
bugontherug: 2) they it tracks spending relative to ability to pay for it.
 
watson.t.hamster
2011-12-30 12:18:03 PM
And Greece tried endless deficit spending without even considering real cuts. Did it work? Anyone?

Waste can be cut from the federal budget without collapsing the entire economy.

Additionally Europe doesn't have the military burden we do, largely because we cover their deficits (remember Libya?).

I would very much like for us to cut our military budget in a sensible way to get spending under control in addition to rooting out waste. Of course that would mean the europeans would either have to increase spending, cut spending elsewhere, or accept an even lesser role on the international stage.
 
DarnoKonrad
2011-12-30 12:18:09 PM
bhcompy: qorkfiend: bhcompy: Okay, Keynes was right. Sure. But that means that you NEED to take austerity measures during good times to get rid of that debt so that you can go back into it again when the cycle hits a low so you don't cripple yourself going forward in the next recession. This didn't happen under Democrat or Republican regimes. The government grew regardless. So were you deficit hawking when we weren't in a recession, Krugman?

Actually, Bill Clinton (and by accident, George W. Bush) did follow the counter-cyclical spending model. Balanced budget, welfare reform, tax increases, all during the dot-com boom, which aided George W. Bush's efforts to ease the recession immediately following 9/11. There was no continuation of the cycle when the economy started to grow again, though; spending was massively increased in the form of the Iraq war instead of shrunk as recommended by Keynes.

It's worth noting that the budget never stopped growing. Revenues grew faster than the budget for a few years, until the next recession. I don't know if I would call that what you called it(counter-cyclical spending model) simply because they didn't reduce spending. It still increased.


Your assertion was wrong.
 
mrshowrules [TotalFark]
2011-12-30 12:18:16 PM
CygnusDarius: Here's the thing, why the American Right wing so farking happy when the European Union fails?.

Europe Union has:

Greece
Portugal
Ireland
Spain
Italy

Unites States has:

Kentucky
Alabama
South Carolina
West Virginia
Mississippi
Tennessee
Louisiana
Florida
Arkansas
Montana
North Carolina

I don't think the EU will fail but if it does, it will be after the US, not before.
 
Larofeticus
2011-12-30 12:19:20 PM
bugontherug: It's not "government's" financial judgment that's questionable. It's the financial judgment of a particular party with a stated agenda to sabotage government with "starve the beast" deficit spending during good times and bad.

Oh, I thought we were talking about Europe. Could you remind me which political party in Europe follows a "starve the beast" policy platform?
 
soy_bomb
2011-12-30 12:19:43 PM
Corvus: So then why is the US with more conservative policies than most of Europe doing so much worse than a much much more socialized country then say Germany?
Oh I forget you can't respond if you don't have talking points to repeat.

img443.imageshack.us
 
bhcompy
2011-12-30 12:19:59 PM
bugontherug: Those are not inflation adjusted figures, so they're almost meaningless. The reason the % of GDP figure is better is because 1) it has a built in inflation adjustment, and 2) they track spending relative to ability to pay for it.

It's an approximation. Doesn't track the ability to pay it, simply because it has nothing to do with tax revenue, which directly pays for our government
 
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