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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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2429 clicks; posted to Politics » on 11 Oct 2012 at 6:33 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-11 08:25:21 PM

Corvus: That's not the hard part. The hard part is with all the people who are always wrong and people KEEP LISTENING TO THEM!!!


"Wizard's First Rule: people are stupid." Richard and Kahlan frowned even more. "People are stupid; given proper motivation, almost anyone will believe almost anything. Because people are stupid, they will believe a lie because they want to believe it's true, or because they are afraid it might be true. People's heads are full of knowledge, facts, and beliefs, and most of it is false, yet they think it all true. People are stupid; they can only rarely tell the difference between a lie and the truth, and yet they are confident they can, and so are all the easier to fool." - Terry Goodkind, 1994
 
2012-10-11 08:25:43 PM

RevCarter: CygnusDarius:
My Reply :D

[i205.photobucket.com image 850x255]

Rebuttal  [oi47.tinypic.com image 850x218]


derp
clearly they got the right two in the wrong place.
the philosophers belong a light year off to the left and the anthropologists are between social and biology somewhere.

But thanks for playing.
 
2012-10-11 08:27:24 PM

Monkeyhouse Zendo: Corvus: That's not the hard part. The hard part is with all the people who are always wrong and people KEEP LISTENING TO THEM!!!

"Wizard's First Rule: people are stupid." Richard and Kahlan frowned even more. "People are stupid; given proper motivation, almost anyone will believe almost anything. Because people are stupid, they will believe a lie because they want to believe it's true, or because they are afraid it might be true. People's heads are full of knowledge, facts, and beliefs, and most of it is false, yet they think it all true. People are stupid; they can only rarely tell the difference between a lie and the truth, and yet they are confident they can, and so are all the easier to fool." - Terry Goodkind, 1994


ok
you made me cry
so many parts of those books were so well done.
alas, the tv show was an abortion
 
2012-10-11 08:37:53 PM
Because Stimulus is working fantastic.
 
2012-10-11 08:39:03 PM

namatad: RevCarter: CygnusDarius:
My Reply :D

[i205.photobucket.com image 850x255]

Rebuttal  [oi47.tinypic.com image 850x218]

derp
clearly they got the right two in the wrong place.
the philosophers belong a light year off to the left and the anthropologists are between social and biology somewhere.

But thanks for playing.


Hey, you know what mathematicians are? Biological organisms whose mental processes are formed through cultural processes.
 
2012-10-11 08:42:48 PM

dericwater: 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.

Not all of Europe. Iceland nailed the banksters and did the opposite of austerity. They're the fastest growing economy in Europe right now.


Then why nobody talks of Iceland?.
 
2012-10-11 08:53:03 PM
I am torn, I hate both austerity and Greeks..
 
2012-10-11 08:53:13 PM

whistleridge: But for some reason, the right sells it as GOVERNMENT SPENDING BAD, RICH GETTING RICHER GOOD people lap it up. Sigh.


for some reason the left peddles When we deficit spend it is NOBLE, but when they deficit spend on the same exact shiat it is EVIL and idiots like you lap it up.

http://blog.scrivener.net/2009/08/krugman-versus-krugman-on-deficits -a nd.html

[] Krugman 2003 [deficit at 3% of GDP, 10-year deficit projection $1.8 trillion]: "I'm terrified ... we're looking at a fiscal crisis that will drive interest rates sky-high ... the conclusion is inescapable ... the task is simply impossible ... the fiscal train wreck, is already under way." Or,

[] Krugman 2009 [deficit at 11% of GDP, 10-year deficit projection $9 trillion]: What's to worry? The Ozzie & Harriet era of government finance will be easy enough to bring back. Just stabilize the debt in terms of GDP and be happy!


also:
If that's not enough evidence, we can just look to our own neighbor Canada. The Canadian federal government has been reducing spending in real terms since the 1990s. As a result, federal spending as a share of GDP has fallen from 22 percent in 1995 to just 15.9 percent today. Compare that to the United States, where the federal government spends 24 percent of GDP, roughly half again as much. And, while Canadian provincial governments spend appreciably more than do most U.S. states, total government spending at all levels in Canada has declined from 53 percent in the 1990s to just 42 percent today - still far too high, but clearly moving in the right direction.

Canada has also cut taxes. Corporate tax rates at the federal level were slashed from 29 percent in 2000 to 15 percent today, less than half the U.S. federal rate. Capital-gains taxes were also cut, as were, to a lesser degree, income taxes.

When Canada - led for so long by the ultra-liberal Pierre Trudeau - has smaller government and lower taxes than the U.S., something is seriously out of whack.

As a result of these changes, Canada's national debt is now less than 34 percent of GDP. Its budget deficit this year will be just 3.5 percent of GDP, while ours will be 8.3 percent. Canada's economy will grow at 2.6 percent this year - a modest rate but faster than ours - and its unemployment rate is 7.3 percent, again better than ours.
http://www.cato.org/publications/commentary/austerity-works
 
2012-10-11 08:53:51 PM

CygnusDarius: Then why nobody talks of Iceland?.


There's another country that didn't dive into austerity and we're doing alright.
 
2012-10-11 08:54:24 PM

CygnusDarius: Then why nobody talks of Iceland?.


It's a small country that never gets any news attention and on top of that, its success goes against the corporatist narrative.

/corporations run the news
//news that goes against the self-interest of the reporter seldom gets reported.
 
2012-10-11 08:55:12 PM

o5iiawah: Because Stimulus is working fantastic.


Actually, you're correct.
 
2012-10-11 08:59:58 PM
Strangely, austerity has the same consequences as another classic Austrian proposal: the gold standard. For a long time I was fooled by that goal too. But once you understand why a hard value monetary standard is bad for the economy, you understand why austerity is too.

It's all about the mattress. A hard standard promotes saving - putting money away in your mattress. That may sound great. People should save! That's good fiscal policy! Except it takes money out of the economy. And the greater the saving, the more the economy freezes out innovation.

Inflation is a stimulus for investment, as it forces money out of the mattress so it doesn't lose value. That may sound horrible. It may sound sick that devaluing money that someone rightfully earned could be considered a goal. Unfortunately, it's also true.

(Too much inflation, of course, is just as unsustainable as too little. There is a growth curve that shows optimal inflationary action for a given economic capacity. Just to push aside any strawmen.)
 
2012-10-11 09:05:42 PM

RevCarter: Hey, you know what mathematicians are? Biological organisms whose mental processes are formed through random neuron firings through complex neural networks.

 
2012-10-11 09:08:16 PM
Austerity: There was a man who had a horse. He was teaching the horse to be more and more frugal. He had been steadily teaching his horse to get by on less and less food, 1/2 of what a normal horse eats, 1/4 of what a normal horse eats. He had almost got to where his horse could get by on nothing when the fool animal up and died.
 
2012-10-11 09:09:07 PM
One thing that seems to be missing with the Austerity measures is how they are upsetting the normal flow of money in the corrupt parts of the local economies. In some places, that is a significant chunk of the CGP.

Another thing to consider is "growth" tends to come from efficiency or removing people from poverty. For most of the last century, growth was from population growth pushing the size of the economy and industrialization (which is just efficiency on a major scale).

Now we also have to deal with the reality that most cord currencies are being inflated way too fast.
 
2012-10-11 09:16:22 PM

wademh: Austerity: There was a man who had a horse. He was teaching the horse to be more and more frugal. He had been steadily teaching his horse to get by on less and less food, 1/2 of what a normal horse eats, 1/4 of what a normal horse eats. He had almost got to where his horse could get by on nothing when the fool animal up and died.


I've learned on Fark the economies don't work like your farm.
 
2012-10-11 09:32:13 PM

namatad: RevCarter: Hey, you know what mathematicians are? Biological organisms whose mental processes are formed through random neuron firings through complex neural networks.


Link
 
2012-10-11 10:14:40 PM

Mercutio74: Debeo Summa Credo: Right. They're farked and will have to either go through austerity and modernization of their workforce. (much more than they have to date) or abandon the euro. Pick your poison.

That's part of the problem, austerity and modernizing the workforce are incompatible.


Sorry, modernizing is the wrong term. Making it more competitive is what I meant. By eliminating inefficient work rules.
 
2012-10-11 10:37:39 PM

LordJiro: Debeo Summa Credo: Orange-Pippin: Brick-House: Or you know, perhaps spending money you do not have to the point that you have to implement these austeritity measures is what ruins your economy.

The U.S. recently finished a decade where major corporations vaporized 2.9 million jobs in America while people (like yourself) supported this with Derp such as "job creator" titles. Since "free trade" was implemented some 60,000 U.S. factories have shut down. Yet you say the solution is to "cut spending" and elect a man (Romney) whose plan would turbo-charge the exit of more family-sustaining jobs???

And your solution is to keep borrowing endless amounts of money? "don't worry, the grand kids will pay for that"

How about raise taxes (particularly on the wealthiest, who benefit more from American infrastructure and can afford to pay more), close the loopholes that allow the wealthy and corporations to pay even less than the rate they actually owe, gut the grossly bloated military budget, and make sure there are no tax breaks or anything for corporations that send jobs overseas?

Basically, look at what Republicans want to do and do the opposite.


Or raise taxes on everyone and cut spending. Just raising them on the rich will barely make a dent. Obama's proposal to eliminate the bush cuts for those making over 250k will save 800b over the next decade, according to the CBO. If we eliminated the cuts for all, we'd raise over $4trillion.

Like it or not, the middle class and poor will have to give something too if we're going to climb out of the hole. Suck it up.
 
2012-10-11 10:57:41 PM

o5iiawah: Because Stimulus is working fantastic.



When half of the stimulus is tax cuts for the wealthy, you can see the result yourself
 
2012-10-11 10:58:32 PM

Debeo Summa Credo: Like it or not, the middle class and poor will have to give something too if we're going to climb out of the hole. Suck it up.



And the best time to do that is in the middle of a stumbling recovery?
 
2012-10-11 11:03:45 PM
The ideology of austerity dates back to the 1930s. Didn't work then and doesn't work now. Ideologues and true believers will never let go of it because they aren't concerned with actually existing reality.
 
2012-10-11 11:04:00 PM

Mercutio74: o5iiawah: Because Stimulus is working fantastic.

Actually, you're correct.


Austerity is the hangover after the good night out - necessary if you live for decades beyond your means with unsustainable spending, public entitlements and tax policies. The funny thing about Stimulus is that it is dependent on people wanting the currency you're getting ready to print. Greece doesn't control the presses in Frankfurt so they really have no say in the matter.

If stimulus worked, it would be working. It didn't solve our unemployment issue now, or in the WPA days (look up the unemployment numbers in the 30's if you dont believe me) the PIIGS countries may not be booming economically but thanks to Austerity measures they wont be as dependent on the taxes of Germans in order to sustain basic levels of government.
 
2012-10-11 11:05:02 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.


I'll let you keep the mosquitos, if you kill all the goddamn gnats.

Seriously, eff those things.
 
2012-10-11 11:05:39 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.


There comes a point where no one will loan you money to support your lifestyle. Greece has reached that point.
 
2012-10-11 11:06:46 PM

intelligent comment below: o5iiawah: Because Stimulus is working fantastic.


When half of the stimulus is tax cuts for the wealthy, you can see the result yourself


and the part that printed money and created works projects failed as well. The jobs were expensive to create and werent sustainable. Thats why the dream of 5.8% unemployment never materialized. Didn't work in the 30's, why should it work now?
 
2012-10-11 11:06:53 PM
My god, Keynesians are a joke.

Full disclosure: I am entirely for productive government spending. If we need to invest in education, do it. If we need to invest in necessary infrastructure, go for it. If we need to invest in better energy technology, by all means. I am also for wealth redistribution. Rich countries should not have people go hungry in the streets, or people dying due to lack of health care. It is unacceptable.

That said, the idea that the solution to all of our problems is just going into debt to give people jobs might be the single worst idea that has ever been dreamed up. It is pure insanity! If you go into debt, and spend that money on something, if it doesn't have an ROI greater than one, it is a net negative for the economy. That is a fact that has always been, is now, and will always be. If you invest in education, it will pay dividends. If you pay people to dig ditches and fill them back up, you're just farking over your country.

To use a current example. There was that story about the tank plant in Lima, Ohio, and the fact that the Pentagon is going to shut it down. Well, the end result of that is going to be a shut down tank plant, a bunch of unemployed factory workers, trained to build tanks, and a ton of debt. Now suppose that was the exact same situation, except instead of tanks, it was a government stimulus project to create jobs. The exact same situation occurs.

It the stimulus plan is to repave roads, those repaved roads must bring in enough money to pay for those roads, and then some. If the stimulus plan is to invest in green energy, that tech must pay for the investment and then some. So often I see these generic Keynesian responses of "just invest in infrastructure and education and energy" without ever getting into the specifics. Well here's a newsflash: if you don't have a specific, necessary bridge, or a skill that is necessary to compete on a global level, or some new technology, those things are all bad for the economy.

Keynesians, for whatever reason, never get specific about what they should spend on. They care more about jobs, than what those jobs actually consist of. This is why Keynesianism destroys countries.

TL;DR: Keynesianism focuses on more on the number of jobs created and the money spent than what those jobs actually consist of and where that money is actually going. If you go into debt and invest in something, if the ROI isn't greater than one, you are hurting the economy.
 
2012-10-11 11:10:07 PM

o5iiawah: It didn't solve



It took America 25 years to get out of the great depression, how long has it been in this one again?
 
2012-10-11 11:11:59 PM

MattStafford: My god, Keynesians are a joke


most of them dont even understand Keynes or have even read anything he ever wrote. Perhaps the biggest fallacy being attached to Keynes is this notion of deficit spending or spending your way out of a hole in order to create a recovery. The bottom line is that Keynes acknowledged his policies would not work in structural debt and deficit. If government operated within its means or even carried a little surplus, it would be well equipped to inject cash into a sector of the economy that was struggling through a market correction as a means of tiding over employment and keeping people off breadlines and unemployment. This is where he and Hayek had a fundamental disagreement but the crux of the argument assumed the government was within some measure of solvency.

This has been somehow interpreted today to mean that Keynes wanted us to print trillions of dollars and go into more debt because of dollar velocity or other such nonsense.
 
2012-10-11 11:13:40 PM

mrshowrules: 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 image 640x266] 

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


economics is poorly thought out ideology dressed up with mathematical abstractions
 
2012-10-11 11:14:23 PM

intelligent comment below: It took America 25 years to get out of the great depression, how long has it been in this one again?


It lasted a generation because FDR's policies were expensive failures that simply tided us over until the post-WW2 era when we were the only country in the world who had any manufacturing left. Thanks for proving my point.
 
2012-10-11 11:21:04 PM

RevCarter: namatad: RevCarter: Hey, you know what mathematicians are? Biological organisms whose mental processes are formed through random neuron firings through complex neural networks.

Link


nice
 
2012-10-11 11:27:25 PM

o5iiawah: intelligent comment below: It took America 25 years to get out of the great depression, how long has it been in this one again?

It lasted a generation because FDR's policies were expensive failures that simply tided us over until the post-WW2 era when we were the only country in the world who had any manufacturing left. Thanks for proving my point.


No. The New Deal was working before the GOP pushed FDR into austerity. FDR had to start over with the New Deal part 2. I wonder why people keep forgetting to mention this.
 
2012-10-11 11:32:39 PM

Debeo Summa Credo: Or raise taxes on everyone and cut spending. Just raising them on the rich will barely make a dent. Obama's proposal to eliminate the bush cuts for those making over 250k will save 800b over the next decade, according to the CBO. If we eliminated the cuts for all, we'd raise over $4trillion.

Like it or not, the middle class and poor will have to give something too if we're going to climb out of the hole. Suck it up.


you know, I am willing to bet that the 99% would have little or no problem with this. IF

IF the 1% had theirs RAISE
IF the 1% were brutalized for using tax shelters and overseas tax havens
IF the 1% were taxed on capital gains (at LEAST at the regular income level)
IF the 1% were taxed on inheritance (DEATH tax my left testicle)
IF caps were put on ALL deductions. PERIOD. Sorry, you can still give to charity, but we are not going to let you deduct 10 million dollars to save on yours taxes.

but NONE of this would ever happen. everyone is afraid to be adults and raise taxes. (they certainly are not cutting spending)

but when the 1% are taxed at an artificially lower rate? farkEM

how about put all the taxes back to the way when clinton was prez and we were close to zero deficit??
HAHAHAH HAHAHAHAHAHAH HAHAHAHAAHAH

sigh
remember when people were talking about what we would do once we had paid off all of the debt?
remember when bush took care of that for us??? sigh
 
2012-10-11 11:42:50 PM

Bucky Katt: o5iiawah: intelligent comment below: It took America 25 years to get out of the great depression, how long has it been in this one again?

It lasted a generation because FDR's policies were expensive failures that simply tided us over until the post-WW2 era when we were the only country in the world who had any manufacturing left. Thanks for proving my point.

No. The New Deal was working before the GOP pushed FDR into austerity. FDR had to start over with the New Deal part 2. I wonder why people keep forgetting to mention this.


Because it is an outright lie which has no basis in fact or reality? And an opposition to state-control of industry isn't "Austerity" it is capitalism, or classical liberalism. The aggregate of both new deals was a stagnant 1930s with no economic growth and a high unemployment rate that fluxuated drastically, compounded by an outright assault on savings. Old people needed social security because by the end of the 30's most people had nothing.

nhegewaldapush.weebly.com
 
2012-10-11 11:47:28 PM

MattStafford: That said, the idea that the solution to all of our problems is just going into debt to give people jobs might be the single worst idea that has ever been dreamed up. It is pure insanity!


yeah the 1950s and 60s were a joke
 
2012-10-11 11:48:25 PM

o5iiawah: intelligent comment below: It took America 25 years to get out of the great depression, how long has it been in this one again?

It lasted a generation because FDR's policies were expensive failures that simply tided us over until the post-WW2 era when we were the only country in the world who had any manufacturing left. Thanks for proving my point.


I love it when you parrot out typical gop lies
 
2012-10-11 11:48:58 PM
When all you do is raise taxes without cutting spending, OF COURSE the economy is going to suffer.

Show me just ONE of those countries that have actually had a year-over-year reduction in total government spending. At best, most have just slowed down the rate of growth.
 
2012-10-11 11:50:58 PM

o5iiawah: Because it is an outright lie which has no basis in fact or reality? And an opposition to state-control of industry isn't "Austerity" it is capitalism, or classical liberalism. The aggregate of both new deals was a stagnant 1930s with no economic growth and a high unemployment rate that fluxuated drastically, compounded by an outright assault on savings. Old people needed social security because by the end of the 30's most people had nothing.


correction. a currency built on the gold standard doesn't just jump back from the greatest market crash in history in only a handful of years. Most people had no money in the market let alone savings after 29 so your fallacy is false
 
2012-10-11 11:52:14 PM
Its pretty simple, you just can't spend more than you take in or you go broke.
 
2012-10-11 11:52:18 PM

Hydra: When all you do is raise taxes without cutting spending, OF COURSE the economy is going to suffer.

Show me just ONE of those countries that have actually had a year-over-year reduction in total government spending. At best, most have just slowed down the rate of growth.


So cutting spending by 5% will take how long to pay off debt equal to 100% gdp?
 
2012-10-11 11:53:04 PM

LargeCanine: Its pretty simple, you just can't spend more than you take in or you go broke.


derp thoughts with another useless shill
 
2012-10-12 12:05:41 AM
Nice to know the fox guarding the henhouse knows which side its bread is buttered on.
 
2012-10-12 12:37:00 AM
Really? Because I thought firing tens of thousands of people would be GOOD for the economy.

/Not really.
 
2012-10-12 01:03:43 AM

fusillade762: 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.


Strawman argument as far as Greece is concerned. Social welfare didn't bankrupt Greece, flat out government employment did.

Apples to, let's say, giant oak tree.
 
2012-10-12 01:06:47 AM

whistleridge: 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...


There was solid growth and a budget surplus in the Clinton years.
 
2012-10-12 01:08:11 AM

Lsherm: Social welfare didn't bankrupt Greece, flat out government employment did.



False. Having to bail out banks then seeing your bond rates rise did.
 
2012-10-12 01:19:39 AM
Then maybe they shouldn't have forced so many countries to do it.
 
2012-10-12 01:22:30 AM

meyerkev: 1) Why is government 50% of GDP to begin with? (This goes for the USA too. I think we're like 43%).


You want to run a modern centralized civilization?
 
2012-10-12 01:30:20 AM

JosephFinn: meyerkev: 1) Why is government 50% of GDP to begin with? (This goes for the USA too. I think we're like 43%).

You want to run a modern centralized civilization?



I want clean water, air, and soil. Safe streets. A business friendly climate. Strong rule of law. etc.

But I don't want to pay for it
 
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