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(The New York Times)   The commie libtards at the IMF conclude that austerity ruins economies   (krugman.blogs.nytimes.com) divider line 189
    More: Obvious, International Monetary Fund, communists, economy  
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2432 clicks; posted to Politics » on 11 Oct 2012 at 6:33 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-11 02:48:05 PM  
Next they'll get to "Rich people don't make jobs, consumers make jobs" and then we'll be in REAL hot water.
 
2012-10-11 02:50:38 PM  
i.imgur.com 
 
2012-10-11 03:04:33 PM  
How many more austerity cuts to Greece, which only further crashes their economy and does almost nothing to close their budget deficit, is it going to take before people realize "Hey, this doesn't work." In every single country Austerity has been implemented, growth has come below expectations and in almost all cases has resulted in negative growth. The single best result from Austerity is Latvia and Estonia, where Austerity promoted growth from GDPs that fell by around 25%, but they remain capped at 90% of their pre-2008 GDP. A partial recovery, that is the single best return from austerity.

IT. DOESN'T. WORK.
 
2012-10-11 03:15:57 PM  
If you phrase it as 'the economy is doing poorly because government refuses to invest in it, and has chosen to freeze money in the hands of a few rather than keep it active in the hands of many', it sounds like obvious truth.

But for some reason, the right sells it as GOVERNMENT SPENDING BAD, RICH GETTING RICHER GOOD people lap it up. Sigh.
 
2012-10-11 03:28:20 PM  
No shiat.

Dusk-You-n-Me: [i.imgur.com image 400x245]


Yeah, that's a better reply.
 
2012-10-11 03:40:05 PM  
Shut the front door! Next they're going to tell us that the government creates jobs, and that rich people having trillions of dollars hiding in off-shore tax havens doesn't. CRAZY!
 
2012-10-11 03:40:11 PM  
People have said that Economics isn't really science, what as there aren't any real-world experiments you can do.

Well, Europe just did an experiment, and the supply-side austerians were proven wrong.

Can we have some fiscal stimulus now?

Thanks.
 
2012-10-11 03:55:46 PM  
No country ever "austeritied" its way out of a recession.
 
2012-10-11 03:56:47 PM  
Yeah, if Romney wins, we're farked.
 
2012-10-11 03:57:57 PM  
On the other hand, we can't just keep on spending like drunken sailors. I guess what they say is true: you don't do austerity in a recession. Maybe if/when we get the economy really moving again, then we can cut government spending by a larger amount.
 
2012-10-11 04:03:51 PM  

xanadian: On the other hand, we can't just keep on spending like drunken sailors. I guess what they say is true: you don't do austerity in a recession. Maybe if/when we get the economy really moving again, then we can cut government spending by a larger amount.


That would require things like discipline, intelligence, and altruism on part of governments.

The problem with spending your way out of a recession is that it only works if the government has discipline in times of plenty. And while that makes great economic sense, it runs exactly counter to human nature:

Good times: Spend money like crazy, because hey - plentiful money, and good times!
Bad times: spend money like crazy, because that's how you get out of recessions!
Good times: pay back from the bad times? What? That's crazy talk! Pay the minimum, and reinvest that money now so the economy can grow! Cutting spending now would hurt growth!

...and so the deficit grow eternally...
 
2012-10-11 04:03:53 PM  

aaronx: People have said that Economics isn't really science, what as there aren't any real-world experiments you can do.

Well, Europe just did an experiment, and the supply-side austerians were proven wrong.

Can we have some fiscal stimulus now?

Thanks.


ronnyeo.files.wordpress.com 

It is a hybrid of a pure science field (math) and sociology/mass psychology.
 
2012-10-11 04:11:01 PM  
Unbelievable.
 
2012-10-11 04:22:41 PM  
this does not bode well for the US economy if Romney wins.

this does not bode well for the US economy if Romney wins.

this does not bode well for the US economy if Romney wins.



Krugman must be sick to death of being right all the damn time.
 
2012-10-11 04:24:55 PM  
I assume this will be denied and ignored because Krugman, and things Krugman has said before when he's been wrong sometimes, and will also ignore reality that is staring us in the face with actual facts and evidence.

Facts & evidence are just parts of liberal elitist academia after all.
 
2012-10-11 04:35:43 PM  
If all the mosquitos were to die off, how many frogs would die? Same principle here. Our economy is just like an ecosystem, you remove a massive part and dominoes fall. Shock therapy on a massive scale hurts very badly. You need to transition slowly so that it isnt an avalanche.
 
2012-10-11 04:38:06 PM  

cman: If all the mosquitos were to die off, how many frogs would die? Same principle here


Wait. We're talking about France now?
 
2012-10-11 05:04:29 PM  

Calmamity: cman: If all the mosquitos were to die off, how many frogs would die? Same principle here

Wait. We're talking about France now?


I thought we were talking about building the Panama Canal.
 
2012-10-11 06:04:58 PM  
Obviously they just didn't austerilize themselves hard enough.
 
2012-10-11 06:36:44 PM  
I'm sorry, IMF, the Secretary disavows any knowledge of your actions.
 
2012-10-11 06:38:34 PM  

unlikely: Next they'll get to "Rich people don't make jobs, consumers make jobs" and then we'll be in REAL hot water.


This is a myth. Cut a business' taxes enough, and they can be profitable without customers. You just need to have government subsidies.
 
2012-10-11 06:39:35 PM  

cman: If all the mosquitos were to die off, how many frogs would die? Same principle here. Our economy is just like an ecosystem, you remove a massive part and dominoes fall. Shock therapy on a massive scale hurts very badly. You need to transition slowly so that it isnt an avalanche.


The slow-slide-into-austerity approach being more like the frog who is boiled to death by being placed in a bath that heats up a little bit at a time so he never notices.
 
2012-10-11 06:39:50 PM  

GAT_00: How many more austerity cuts to Greece, which only further crashes their economy and does almost nothing to close their budget deficit, is it going to take before people realize "Hey, this doesn't work." In every single country Austerity has been implemented, growth has come below expectations and in almost all cases has resulted in negative growth. The single best result from Austerity is Latvia and Estonia, where Austerity promoted growth from GDPs that fell by around 25%, but they remain capped at 90% of their pre-2008 GDP. A partial recovery, that is the single best return from austerity.

IT. DOESN'T. WORK.


Who is going to keep giving money to Greece. Please share with the class.

Is your solution to keep forcing the EU to give Greece whatever finds they want?
 
2012-10-11 06:41:44 PM  

aaronx: People have said that Economics isn't really science, what as there aren't any real-world experiments you can do.

Well, Europe just did an experiment, and the supply-side austerians were proven wrong.

Can we have some fiscal stimulus now?

Thanks.


Estonia doesn't count!

Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.
 
2012-10-11 06:42:35 PM  

give me doughnuts: No country ever "austeritied" its way out of a recession.


Estonia raises its hand. So does Australia. See the 1930s for the latter case.
 
2012-10-11 06:44:52 PM  

Mentat: Obviously they just didn't austerilize themselves hard enough.


Last time we had a deficit of austerlitz, there was this big war over to France.
 
2012-10-11 06:46:46 PM  

MyRandomName: Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.


Fair enough. But to draw an analogy, if you're trying to get a heavy plane over a mountain, you don't want to jettison the engines because they are the heaviest things on the plane.
 
2012-10-11 06:47:39 PM  

Calmamity: Krugman must be sick to death of being right all the damn time.


That's not the hard part. The hard part is with all the people who are always wrong and people KEEP LISTENING TO THEM!!!
 
2012-10-11 06:47:40 PM  
This is all just the Germans getting revenge for the Treaty of Versailles
 
2012-10-11 06:49:24 PM  

mrshowrules: It is a hybrid of a pure science field (math) and sociology/mass psychology.


Just have them put Philosophy to the right of Mathematics and we'll be all set.
 
2012-10-11 06:50:12 PM  
Race to the bottom, folks.
 
2012-10-11 06:50:17 PM  

MyRandomName: aaronx: People have said that Economics isn't really science, what as there aren't any real-world experiments you can do.

Well, Europe just did an experiment, and the supply-side austerians were proven wrong.

Can we have some fiscal stimulus now?

Thanks.

Estonia doesn't count!

Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.


What if the country spends a bunch of money on infrastructure instead of filling a giant bag with cash and leaving it on Mitt Romney's doorstep?
 
2012-10-11 06:50:21 PM  

MyRandomName: Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.


They did. I don't think anyone is arguing that. But you are making a strawman of what Krugman and Keynesians economists believe. It seem like you have no farking clue what keynesians is if you think it is just "Spend more on anything and you will always do better!!!" because that's not what it says at all!!

You are making up something no one is actually saying so your sides stupid ideas sound less stupid in comparison.
 
2012-10-11 06:50:57 PM  
So you mean that when government is 50% of your GDP, you shouldn't knock large percentages off the government budget unless you want to cause a massive recession? Who knew?

Somewhat less snarkily:

1) Why is government 50% of GDP to begin with? (This goes for the USA too. I think we're like 43%).
2) That's probably a case of "Damned if you do, Damned if you don't". On the one hand, when your biggest industry is government, killing it is a bad idea. On the other hand: There. Was. No. Money. They didn't have a choice there. The only way to get more money was to balance the budget, and the only way to do that (barring the time-honored tradition of inflating the currency, which they can't do thanks to the Euro) was to cut the government and lay people off, which in turn caused a recession.

/Seriously, does anyone have graphs of public vs. private sector GDP growth over the last few decades for the US and others. How much of "growth" has been the government, and how much is actual growth?
 
2012-10-11 06:52:55 PM  

Mercutio74: MyRandomName: Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.

Fair enough. But to draw an analogy, if you're trying to get a heavy plane over a mountain, you don't want to jettison the engines because they are the heaviest things on the plane.


Greece is also in trouble because major sectors of their economy, like shipping magnates, managed to hard-wire tax-exempt status for themselves into the Greek constitution. Or, as it is better known, the Romney/Ryan 2012 campaign platform.
 
2012-10-11 06:53:13 PM  
I think I've found my Fark troll account name: Commie Libtard.
 
2012-10-11 06:53:28 PM  
Austerity isn't really a policy in the conventional sense. Find me someone who is pro-austerity regardless of circumstances. The very presence of austerity in the top choices implies the country's already farked or very close to it.

But as far as TFA goes, really, directly reducing a component of the GDP at a time GDP is already falling causes the GDP to fall? Shocking!

Austerity is not a direct path to prosperity and anyone who claims it is either doesn't understand basic economics or is lying. However, I have not seen anyone who's not an anarchist claim that the total collapse of the government is prefferable.
 
2012-10-11 06:54:17 PM  
So we should just run up limitless amounts of debt! We can always just print more money. What could possibly go wrong?
 
2012-10-11 06:58:38 PM  

Corvus: MyRandomName: Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.

They did. I don't think anyone is arguing that. But you are making a strawman of what Krugman and Keynesians economists believe. It seem like you have no farking clue what keynesians is if you think it is just "Spend more on anything and you will always do better!!!" because that's not what it says at all!!

You are making up something no one is actually saying so your sides stupid ideas sound less stupid in comparison.


And I seem to recall reading somewhere that Germany spends more (as a percentage of GDP) on social welfare programs than Greece did, and their economy didn't collapse. So there are other factors at play here. 

Though someone please correct me if I'm wrong, I can't find a citation.
 
2012-10-11 06:59:42 PM  

cryinoutloud: I think I've found my Fark troll account name: Commie Libtard.


I'm surprised it's not taken
 
2012-10-11 06:59:59 PM  
Here's a hint, if the economy has slowed down due to lack of private sector spending, reducing the spending of the largest single entity in the economy won't grow the economy, it will reduce it further.

/The problem most governments have, is they fail to cut spending and pay down debt once the private sector recovers and is growing again
 
2012-10-11 07:00:05 PM  
I think you'll find it achieves its objectives.
 
2012-10-11 07:00:54 PM  

Shaggy_C: So we should just run up limitless amounts of debt! We can always just print more money. What could possibly go wrong?


Ask Ronald Reagan and Bush II. You just have to blame it on the next Democrat to win the White House. After all, as Dick Cheney told us all: Deficits don't matter.
 
2012-10-11 07:02:53 PM  

gimmegimme: MyRandomName: aaronx: People have said that Economics isn't really science, what as there aren't any real-world experiments you can do.

Well, Europe just did an experiment, and the supply-side austerians were proven wrong.

Can we have some fiscal stimulus now?

Thanks.

Estonia doesn't count!

Greece spent well above their means the last decade. It did not make them economically stable. Are you really going to argue it was austerity that got them to the tipping point? It was the out of control spending that got them to this point.

What if the country spends a bunch of money on infrastructure instead of filling a giant bag with cash and leaving it on Mitt Romney's doorstep?


They didn't spend all that much, they just didn't collect any money- any money that they taxed was stolen by the tax collectors. If they were still on drachmas, it would be a fascinating experiment in using inflation as a form of tax collection. Now, not so much.
 
2012-10-11 07:02:58 PM  

Shaggy_C: So we should just run up limitless amounts of debt! We can always just print more money. What could possibly go wrong?


If your goal is survival of the nation and you view the world purely in black and white terms, that would be preferable to austerity.

However, if you view the world in a nuanced way, taking on debt to stimulate economic growth and then reducing spending and increasing revenue as the economic engine comes back to life would be better.

Even better would be making sure that the stimulus money you "print" ends up in the hands of the parts of the populace that are likely to immediately inject it back into the economy. Then, creating an environment where a moneyed middle class can thrive as a long term goal will create a more robust protection from future crashes.
 
2012-10-11 07:04:27 PM  
NO FARKYING WAY!!!!
 
2012-10-11 07:04:31 PM  
So has Greece sent a note to the EU saying "see, austerity doesn't work! Give us more money?"
 
2012-10-11 07:05:25 PM  
It doesn't matter.

Before the financial crisis everybody apart from a few nutjob right-wingers knew this, and it still got implemented. Next time there's a financial crisis, the same nutjob right-wingers will push for it again, it will fail again and everyone will say "Huh, austerity doesn't work!", like it's some amazing farking revelation.

Letting Austrian economists dictate your economic policy is like letting creationists write your biology textbooks. The only difference is that most educated people realise creationism is bunk, while Austrian economics, despite similarly bearing zero relation to observable reality, is somehow accepted.
 
2012-10-11 07:06:41 PM  
The problem is the underlying fiat reserve system couple with compounding interest. We need exponential growth because debt service must come from actual wealth creation (harvesting of natural resources, manufacturing). Its like a "tax" on overall GDP, money that could be used to improve our lives, but instead goes to lenders in the form on interest.
 
2012-10-11 07:07:02 PM  

Shaggy_C: So we should just run up limitless amounts of debt! We can always just print more money. What could possibly go wrong?


Escape-to-strawman.
 
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