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(New Europe)   Jose Manuel Barroso, the president of the European Commission has just realised - strategically, of course, since the European elections are coming soon - that austerity is not a good solution if it doesn't stimulate economic growth   (neurope.eu) divider line 39
    More: Amusing, Manuel Barroso, European Elections, European Commission, Europeans, economic growths, democratic principles, New Europe  
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392 clicks; posted to Politics » on 06 May 2013 at 8:38 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-06 08:41:52 AM
You think?
 
2013-05-06 08:44:29 AM
Because.

Because it doesn't stimulate economic growth.
 
2013-05-06 08:45:26 AM
that austerity is not a good solution if it doesn't stimulate economic growth

Anyone who sincerely thought this has no clue what austerity actually is.
 
2013-05-06 08:45:35 AM
In order to see the silver lining in a shiatty situation... can we all agree NOW that austerity is the worst possible course of action when you're dealing with a fragile economy?
 
2013-05-06 08:47:26 AM

IlGreven: Because.

Because it doesn't stimulate economic growth.


Yes but it helps us prevent some perceived doom that always seems to be further down the road.

It's all about intentionally punishing ourselves now so that we don't face a bigger punishment later (economically speaking).
 
2013-05-06 08:48:18 AM
Cutting government waste is reasonable.  Assuming all government spending is waste is asinine.
 
2013-05-06 08:50:46 AM

Mercutio74: In order to see the silver lining in a shiatty situation... can we all agree NOW that austerity is the worst possible course of action when you're dealing with a fragile economy?


I agree.

But then I also wonder what would have been a better solution to handle the debt crisis in some of these European countries. Because austerity definitely isn't the right answer.

Sadly the people who do believe in Austerity treat it so much like a religion that they'll reject any evidence that austerity might not be the right answer.
 
2013-05-06 08:50:49 AM

Mrtraveler01: IlGreven: Because.

Because it doesn't stimulate economic growth.

Yes but it helps us prevent some perceived doom that always seems to be further down the road.

It's all about intentionally punishing ourselves now so that we don't face a bigger punishment later (economically speaking).


I could understand this philosophy, maybe even agree with it somewhat, if the people being "punished" were also those that committed the economic transgressions.
 
2013-05-06 08:53:03 AM
Austerity: Penury for the peasants is proper, but ruffling the rich is wrong.
 
2013-05-06 08:54:02 AM

Tomahawk513: Mrtraveler01: IlGreven: Because.

Because it doesn't stimulate economic growth.

Yes but it helps us prevent some perceived doom that always seems to be further down the road.

It's all about intentionally punishing ourselves now so that we don't face a bigger punishment later (economically speaking).

I could understand this philosophy, maybe even agree with it somewhat, if the people being "punished" were also those that committed the economic transgressions.


But of course it never is. Instead it's those blasted Social Services, even in countries like Greece where they relied on Goldman Sachs to handle their debt and only made it worse on top of piss poor tax enforcement.
 
2013-05-06 08:59:29 AM
copypasta much, subby?

the worst think about 'austerity' is the naked ideology. All the right wing molluscs who previously thought they couldn't get away with all of the 'fark the poors' stuff they really wanted to do, have seen and seized their moment. Society will feel the effects for generations.
 
2013-05-06 09:02:28 AM
It Greece, they cut minimum wage as part of their Austerity program.  How the heck was that supposed to help reduce government deficits?  It anything reducing minimum wage will make government deficits worse by lowering consumption.
 
2013-05-06 09:18:56 AM
Austerity as a debt-reduction measure only looks at one half of the equation: spending. But you also need to grow the economy, to increase revenue. It's not really abvout debt reduction though, it's about protecting the rich at the expense of the poor (ie business as usual). Inconveniently though, when it comes to election time, a poor person's vote counts as much as a rich person's (for now).
 
2013-05-06 09:20:11 AM
austerity won't be able to really meet its potential until the rich can ensure that the people harmed by it aren't allowed to vote.
 
2013-05-06 09:26:25 AM

Muta: It Greece, they cut minimum wage as part of their Austerity program.  How the heck was that supposed to help reduce government deficits?  It anything reducing minimum wage will make government deficits worse by lowering consumption.


I can't speak for Greece, but in the States arguments against minimum wage increases are that they will cause people to lose their jobs since, presumably, the business could no longer afford to pay them.  Personally, I find this scenario highly unlikely for the vast majority of businesses since, while the businesses costs increase, the purchasing power of their clientele also increases, allowing them to charge more for their product and hopefully offsetting the increased cost of labor.
 
2013-05-06 09:26:43 AM
The article was extraordinarily light on detail as to what austerity measures have actually been implemented in which countries, and what is failing.  There was one example in Romania where public sector salaries were cut by 25%.  To what extent and what implementations of austerity were actually carried out in other countries, and how much of their current economic issues can be directly tied to that austerity?  Austerity usually implies spending cuts and/or tax increases.
 
2013-05-06 09:31:44 AM

Apocalyptic Inferno: Austerity usually implies spending cuts and/or tax increases.


Fixed that for you...
 
2013-05-06 09:32:18 AM
Europe. Where the majority of countries have raised taxes while continuing to increase spending. But since raising taxes is technically a form of austerity, Krugman gets to shout the word from the rooftops convincing the ignorant Europe is cutting spending. Ignore the fact that what Europe implemented was identical to the democrat plan.

Sure spending is up 25% in the vast majority of EU countries since 08... austerity! More taxes! This way when it fails we can blame austerity again.
 
2013-05-06 09:33:41 AM

MyRandomName: Europe. Where the majority of countries have raised taxes while continuing to increase spending. But since raising taxes is technically a form of austerity, Krugman gets to shout the word from the rooftops convincing the ignorant Europe is cutting spending. Ignore the fact that what Europe implemented was identical to the democrat plan.

Sure spending is up 25% in the vast majority of EU countries since 08... austerity! More taxes! This way when it fails we can blame austerity again.


Ah yes, I was waiting for the "No True Austerity" argument to show up.
 
2013-05-06 09:35:24 AM

WhoIsNotInMyKitchen: austerity won't be able to really meet its potential until the rich can ensure that the people harmed by it aren't allowed to vote.


Cutting back on government handouts is politically unpopular?  You're not saying Free Stuff wins elections are you?
 
2013-05-06 09:37:37 AM
Here's what Austerity looks like in the UK.

http://www.guardian.co.uk/news/datablog/2010/apr/25/uk-public-spendi ng -1963

/BTW: Public Spending as a percentage of GDP has actually gone down in the UK
 
2013-05-06 09:50:52 AM

Tarl3k: Apocalyptic Inferno: Austerity usually implies spending cuts and/or tax increases.

Fixed that for you...


Not sure why you think you had to "fix" it.  Austerity is budget deficit reduction through spending cuts, tax increases, or a combination of the two.
 
2013-05-06 09:52:19 AM
Austerity?

If you haven't read The Shock Doctrine, go read it.  If you aren't aware that austerity is simply legal thievery for the super elite, this thread won't have any meaningful conversation.
 
2013-05-06 09:53:14 AM
That's funny - the only major economy in the EU with any real strength is Germany - you know, the one that's also the only one that actually committed to real austerity measures. Germany's the only major economic power that's growing - while the rest of the EU is either shrinking or, at best, stagnant (like France and the UK). Germany would be doing a lot better if it weren't being dragged down by the Euro.

The ratings agencies are downrating Germany - because it's vulnerable to future Euro bailouts.

Switzerland is doing okay, too - because they're smart enough to effectively be in austerity mode all of the time, compared to the rest of the continent. They're also smart enough to have stayed out of the EU and kept their own currency...
 
2013-05-06 09:54:56 AM

Zeb Hesselgresser: WhoIsNotInMyKitchen: austerity won't be able to really meet its potential until the rich can ensure that the people harmed by it aren't allowed to vote.

Cutting back on government handouts is politically unpopular?  You're not saying Free Stuff wins elections are you?


The ultra-rich aren't going to sleep with you, Talking Points Monkey.

/Frank Luntz might send you a t-shirt, though.
 
2013-05-06 09:55:04 AM

Mrtraveler01: It's all about intentionally punishing ourselves now so that we don't face a bigger punishment later (economically speaking).


No surprise that the religious fall for it so easily then.
 
2013-05-06 10:02:05 AM

cirby: That's funny - the only major economy in the EU with any real strength is Germany - you know, the one that's also the only one that actually committed to real austerity measures. Germany's the only major economic power that's growing - while the rest of the EU is either shrinking or, at best, stagnant (like France and the UK). Germany would be doing a lot better if it weren't being dragged down by the Euro.

The ratings agencies are downrating Germany - because it's vulnerable to future Euro bailouts.

Switzerland is doing okay, too - because they're smart enough to effectively be in austerity mode all of the time, compared to the rest of the continent. They're also smart enough to have stayed out of the EU and kept their own currency...


Actually Norway's doing better than Switzerland. But that doesn't fit with your theory, so you ignore them.
 
2013-05-06 10:17:59 AM

cirby: Germany would be doing a lot better if it weren't being dragged down by the Euro.


Not sure if that's entirely accurate.  Currency weakness tends to help net exporter countries that ship high-tech goods (low demand elasticity products).  The value of the Euro is pumped upward by countries like Germany, but dragged down by Italy, Greece, etc.  Recall that Germany has the second largest net export surplus in the world.  If anything, Germany wants to keep the Euro together because it helps them maintain a weaker currency.  If the EU were to jettison the poorer performing countries it would boost the value of the currency hurting Germany's export business (a big component of their GDP ~50%).
 
2013-05-06 10:19:27 AM

Lochsteppe: Zeb Hesselgresser: WhoIsNotInMyKitchen: austerity won't be able to really meet its potential until the rich can ensure that the people harmed by it aren't allowed to vote.

Cutting back on government handouts is politically unpopular?  You're not saying Free Stuff wins elections are you?

The ultra-rich aren't going to sleep with you, Talking Points Monkey.

/Frank Luntz might send you a t-shirt, though.


Lock Step response with Ad Hominem Non Sequitur.  Awesome, very sharp.
 
2013-05-06 10:20:41 AM
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2013-05-06 10:47:12 AM
I see we have the goose-stepping right-wing trash defending "austerity" ITT already. I always wonder, if you people like being stolen from so much why not just leave your doors open and unlocked in the morning instead of trying to enact policy for it?
 
2013-05-06 10:56:18 AM

A Dark Evil Omen: I see we have the goose-stepping right-wing trash defending "austerity" ITT already. I always wonder, if you people like being stolen from so much why not just leave your doors open and unlocked in the morning instead of trying to enact policy for it?


Because it's more exciting when it happens on a massive and essentially unstoppable scale.  It's like they're part of something important instead of merely tussling with their neighbors over their last-place aversion.

/Plus the rich have soft hands, so it just feels better.
 
2013-05-06 11:26:48 AM
So the economic self-flagellation that is austerity doesn't help the economy?

Color me shocked. I mean, it was only like 80 years ago during the last global depression that (some) people figured this out.
 
2013-05-06 11:36:22 AM

cirby: That's funny - the only major economy in the EU with any real strength is Germany - you know, the one that's also the only one that actually committed to real austerity measures. Germany's the only major economic power that's growing - while the rest of the EU is either shrinking or, at best, stagnant (like France and the UK). Germany would be doing a lot better if it weren't being dragged down by the Euro.

The ratings agencies are downrating Germany - because it's vulnerable to future Euro bailouts.

Switzerland is doing okay, too - because they're smart enough to effectively be in austerity mode all of the time, compared to the rest of the continent. They're also smart enough to have stayed out of the EU and kept their own currency...


farking bullshiat! Spain followed every budget rule way better than Germany did. Had a lower public debt and deficit as well. When the crisis hit they got labeled as deficit spenders (as you need to do to shore up demand) and their bond prices went through the roof while Germany lectures the Spanish on fiscal restraint.
 
2013-05-06 12:22:54 PM

Lupine Chemist: cirby: That's funny - the only major economy in the EU with any real strength is Germany - you know, the one that's also the only one that actually committed to real austerity measures. Germany's the only major economic power that's growing - while the rest of the EU is either shrinking or, at best, stagnant (like France and the UK). Germany would be doing a lot better if it weren't being dragged down by the Euro.

The ratings agencies are downrating Germany - because it's vulnerable to future Euro bailouts.

Switzerland is doing okay, too - because they're smart enough to effectively be in austerity mode all of the time, compared to the rest of the continent. They're also smart enough to have stayed out of the EU and kept their own currency...

farking bullshiat! Spain followed every budget rule way better than Germany did. Had a lower public debt and deficit as well. When the crisis hit they got labeled as deficit spenders (as you need to do to shore up demand) and their bond prices went through the roof while Germany lectures the Spanish on fiscal restraint.


True.

When in reality it's because Spain encountered the same real estate bubble burst just like we did here in the United States.

Germany was just lucky enough to have a manufacturing sector that is still churning strong. The Mediterranean countries relied too much on real estate and tourism to prop up their economies.
 
2013-05-06 12:32:53 PM

Mrtraveler01: Mercutio74: In order to see the silver lining in a shiatty situation... can we all agree NOW that austerity is the worst possible course of action when you're dealing with a fragile economy?

I agree.

But then I also wonder what would have been a better solution to handle the debt crisis in some of these European countries. Because austerity definitely isn't the right answer.

Sadly the people who do believe in Austerity treat it so much like a religion that they'll reject any evidence that austerity might not be the right answer.


Print money.

Oh wait, they can't because of some sort of stupid shared currency scheme.
 
2013-05-06 12:58:20 PM

Mrtraveler01: Lupine Chemist: cirby: That's funny - the only major economy in the EU with any real strength is Germany - you know, the one that's also the only one that actually committed to real austerity measures. Germany's the only major economic power that's growing - while the rest of the EU is either shrinking or, at best, stagnant (like France and the UK). Germany would be doing a lot better if it weren't being dragged down by the Euro.

The ratings agencies are downrating Germany - because it's vulnerable to future Euro bailouts.

Switzerland is doing okay, too - because they're smart enough to effectively be in austerity mode all of the time, compared to the rest of the continent. They're also smart enough to have stayed out of the EU and kept their own currency...

farking bullshiat! Spain followed every budget rule way better than Germany did. Had a lower public debt and deficit as well. When the crisis hit they got labeled as deficit spenders (as you need to do to shore up demand) and their bond prices went through the roof while Germany lectures the Spanish on fiscal restraint.

True.

When in reality it's because Spain encountered the same real estate bubble burst just like we did here in the United States.

Germany was just lucky enough to have a manufacturing sector that is still churning strong. The Mediterranean countries relied too much on real estate and tourism to prop up their economies.


True, but imagine if Florida or Nevada and not the US gov't were responsible for social security payments after the 2008 crash, it would understandably be a major crisis. This is exactly the Spanish situation. While locals certainly were guilty of overextending just like in the US, a lot of the bubble came from foreigners (often from the same Northern countries) buying property as well.

Honestly, the lesson I get from the Spanish situation is that it's a bad idea to have fiscal restraint in good times since you won't be able to use that to get the spending you need in bad times. Might as well ramp up spending as high as you can while it's available.
 
2013-05-06 04:23:57 PM
And now a little word problem for you all, my fellow Farkers:

a. Ted, a 3-year-old boy, goes through several growth spurts. Over the next 5 years he doubles in height, and triples in weight.

b. Ed, a 20 year-old guy, gets sucked into World of Warcraft. Over the next two years his sedentary lifestyle causes him to gain 100 pounds of bodyfat. He also drops out of college and loses all of his friends.

c. Ned, a 40 year-old unemployedRealtor, takes a long hard look at his life and decides to take a different course. He gets a lower-paying job, goes to community college, and uses his extra free time to read, workout, and rekindle old friendships. Though his income is reduced, he also reduces his expenses and starts paying off credit card debt.

Now using the typical economist's/politician's definition of "growth", which of the three people above "grew"? And who above underwent "austerity"?

Why do we only consider growth to be a net increase in the aggregate monetary measure of total "stuff", as if humanity were just a great big got-damn tumor, incapable of becoming more sophisticated, refined or sustainable? I would certainly like to think I "grew" between the ages of 20 and 40, but that doesn't mean I doubled in size, like a freaking colony of E. coli in a petri dish.

THINK, goddamn us all, THINK!
 
2013-05-06 04:59:08 PM

Muta: Cutting government waste is reasonable.  Assuming all government spending is waste is asinine.


That was brilliant. I may have to borrow this for the odd discussion with some republican/libertarian friends.
 
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