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On March 14 2013 18:12 McBengt wrote:Show nested quote +On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase.
It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages.
There's also this problem:
![[image loading]](http://1.bp.blogspot.com/-S6Gx6RCpyY4/ULFIkRAzu-I/AAAAAAAAAT0/YTzHr4bvJLE/s640/marginal-tax_2.PNG)
Link to blog article
Link to CBO report
Many people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits.
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I don't get why people are taking paul ryans plan seriously as a budget plan. Even ryan himself is saying that its just as partisan as the democrat budget plan (which they haven't released one before the ipad was released). Like I said a few weeks ago this is just the GOP's new plan of slow and steady compromise until a budget is finalized with concessions and compromise's from each side.
Ryans budget plan is just the stupid unacceptable first offer in an barter for them to start at some point where it advantages them more then anything else.
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On March 15 2013 01:45 Sermokala wrote:
I don't get why people are taking paul ryans plan seriously as a budget plan. Even ryan himself is saying that its just as partisan as the democrat budget plan (which they haven't released one before the ipad was released). Like I said a few weeks ago this is just the GOP's new plan of slow and steady compromise until a budget is finalized with concessions and compromise's from each side.
Ryans budget plan is just the stupid unacceptable first offer in an barter for them to start at some point where it advantages them more then anything else.
NPR seems to agree with that assessment:
In the ongoing Washington budget battles, one word gets more of a workout than most: balanced.
This single word illustrates the vast distance between the parties. Democrats and Republicans are working from very different definitions of the term in discussing their budget proposals being unveiled this week. ...
What neither side is saying: We know our "balanced" budgets are dead on arrival. The Democratic version is expected to pass only in the Democratically controlled Senate; the Republican version is expected to pass only in the GOP-controlled House. But neither of these vision documents will actually guide federal policy or government spending. They are markers, position papers, political documents complete with numbers and graphs. If you're an optimist hoping for a big deficit-reduction deal, they're opening offers on the path to a grand bargain. If you're a pessimist or maybe just a realist, they're a sign of the intractable differences between the parties and proof that we'll keep stumbling from one man-made fiscal crisis to the next.
Source
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On March 15 2013 01:37 JonnyBNoHo wrote:Show nested quote +On March 14 2013 18:12 McBengt wrote:On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase. It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages. There's also this problem: Link to blog articleLink to CBO reportMany people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits.
I like your graph, it is weird how that works. I remember getting a pay rise and moving past a threshold in the low income tax offset and actually getting a small net pay cut as a result.
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On March 14 2013 13:10 KwarK wrote:Show nested quote +On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing.
Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested.
http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.html
http://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazer
I have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear.
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United States43219 Posts
On March 15 2013 05:24 ziggurat wrote:Show nested quote +On March 14 2013 13:10 KwarK wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing. Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested. http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.htmlhttp://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazerI have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear.
My point is that slashing the budget to repay the deficit based upon assumptions of economic growth is a fiction because the two numbers are connected. You can't take large sums of money out of the economy without experiencing economic contraction and if the shock is sudden enough you'll actually end up spending as much as you did before trying to repair the damage you caused. We're borrowing more, not less, in the UK since the beginning of austerity.
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The chances of a government shutdown at the end of the month keep going down.
On Thursday, House Speaker John Boehner avoided one more tripwire when he rejected conservative demands that Republicans use government funding legislation to pick a fight over defunding the Affordable Care Act.
“Trying to put Obamacare on this vehicle risks shutting down the government,” Boehner told reporters at his weekly Capitol briefing.”That’s not what our goal is. Our goal is to reduce spending.”
Assuming the Senate passes its spending measure this week, the House will have to take it up and clear it by March 27 — the day the government’s budget authority expires. If Democrats support the bill in large numbers, that shouldn’t be a problem. But the question is whether House Republicans will oppose it this time around now that conservatives have endorsed using it to pick a fight over Obamacare.
Source
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On March 15 2013 05:28 KwarK wrote:Show nested quote +On March 15 2013 05:24 ziggurat wrote:On March 14 2013 13:10 KwarK wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing. Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested. http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.htmlhttp://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazerI have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear. My point is that slashing the budget to repay the deficit based upon assumptions of economic growth is a fiction because the two numbers are connected. You can't take large sums of money out of the economy without experiencing economic contraction and if the shock is sudden enough you'll actually end up spending as much as you did before trying to repair the damage you caused. We're borrowing more, not less, in the UK since the beginning of austerity.
My points were that (1) the economic contraction that you've described in the UK is due more to the crappy global economy than it is to austerity measures; and in any event (2) you shouldn't generalize the UK experience to every other country.
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October 11th, 2012
Paul Ryan: Hey everybody, I'm a bit of a policy wonk and here's how I'd approach the federal budget.
November 7th, 2012
Voting population: No thanks.
March 11th, 2013
Paul Ryan: Hey everybody, I'm a bit of a policy wonk and here's how I'd approach the federal budget. I'm going to call it a blueprint this time 
March 14th, 2013
John Boehner: No thanks.
I expect William Buckley himself to rise from the dead to knock down the next one.
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United States43219 Posts
On March 15 2013 07:28 ziggurat wrote:Show nested quote +On March 15 2013 05:28 KwarK wrote:On March 15 2013 05:24 ziggurat wrote:On March 14 2013 13:10 KwarK wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing. Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested. http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.htmlhttp://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazerI have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear. My point is that slashing the budget to repay the deficit based upon assumptions of economic growth is a fiction because the two numbers are connected. You can't take large sums of money out of the economy without experiencing economic contraction and if the shock is sudden enough you'll actually end up spending as much as you did before trying to repair the damage you caused. We're borrowing more, not less, in the UK since the beginning of austerity. My points were that (1) the economic contraction that you've described in the UK is due more to the crappy global economy than it is to austerity measures; and in any event (2) you shouldn't generalize the UK experience to every other country.
Other countries in similar positions which didn't commit to harsh austerity measures came out of the recession years ago and are now experiencing growth. They're also part of the same global economy so 1 can be disregarded as nonsensical. Obviously all countries are different but I'm making a general point that austerity in the UK caused rapid economic contraction and the result of that in the UK was that the debt actually increased. If you can provide reasons why that example doesn't apply elsewhere then feel free to bring them up, otherwise the UK experience is relevant to the decision facing the US.
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On March 15 2013 07:40 KwarK wrote:Show nested quote +On March 15 2013 07:28 ziggurat wrote:On March 15 2013 05:28 KwarK wrote:On March 15 2013 05:24 ziggurat wrote:On March 14 2013 13:10 KwarK wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing. Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested. http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.htmlhttp://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazerI have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear. My point is that slashing the budget to repay the deficit based upon assumptions of economic growth is a fiction because the two numbers are connected. You can't take large sums of money out of the economy without experiencing economic contraction and if the shock is sudden enough you'll actually end up spending as much as you did before trying to repair the damage you caused. We're borrowing more, not less, in the UK since the beginning of austerity. My points were that (1) the economic contraction that you've described in the UK is due more to the crappy global economy than it is to austerity measures; and in any event (2) you shouldn't generalize the UK experience to every other country. Other countries in similar positions which didn't commit to harsh austerity measures came out of the recession years ago and are now experiencing growth. They're also part of the same global economy so 1 can be disregarded as nonsensical. Obviously all countries are different but I'm making a general point that austerity in the UK caused rapid economic contraction and the result of that in the UK was that the debt actually increased. If you can provide reasons why that example doesn't apply elsewhere then feel free to bring them up, otherwise the UK experience is relevant to the decision facing the US.
If the debt increased then how can you consider it austerity?
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United States43219 Posts
On March 15 2013 07:44 Vegetarian wrote:Show nested quote +On March 15 2013 07:40 KwarK wrote:On March 15 2013 07:28 ziggurat wrote:On March 15 2013 05:28 KwarK wrote:On March 15 2013 05:24 ziggurat wrote:On March 14 2013 13:10 KwarK wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. We did that in the UK. Unfortunately slashing the public sector with spending cuts while reducing the disposable income of those on benefits caused the economy to suddenly contract. The recession turned into a double dip recession, then into a triple dip recession. Unemployment rose, investment fell during the instability and government spending actually rose as people fell onto the safety net. The estimates for debt repayment were first pushed backwards, then scrapped and a new estimate for when the budget would be balanced was created, then that was scrapped and they stopped making estimates because it was making them look like they had no clue what they were doing. Canada also went through a period of severe austerity a few years back. It was very painful at the time, but I don't think anyone today would argue that it hasn't paid great dividends. It's particularly interesting because it was done by a centre-left government. Here are a couple of articles about it, in case you're interested. http://marginalrevolution.com/marginalrevolution/2010/04/the-public-choice-of-spending-cuts.htmlhttp://www.guardian.co.uk/society/2010/jan/13/paul-martin-budget-deficit-trailblazerI have sympathy for people in other countries that are now facing some very tough choices. I'm very grateful that we in Canada don't face those same choices -- although our current government is back to running deficits, which I am not happy about. Anyway, it's not a happy thing to have to cut government programs at a time when the global economy is in the tank. There's never really a "good" time to do it. It takes a certain amount of political courage to tell people a truth that they don't want to hear. My point is that slashing the budget to repay the deficit based upon assumptions of economic growth is a fiction because the two numbers are connected. You can't take large sums of money out of the economy without experiencing economic contraction and if the shock is sudden enough you'll actually end up spending as much as you did before trying to repair the damage you caused. We're borrowing more, not less, in the UK since the beginning of austerity. My points were that (1) the economic contraction that you've described in the UK is due more to the crappy global economy than it is to austerity measures; and in any event (2) you shouldn't generalize the UK experience to every other country. Other countries in similar positions which didn't commit to harsh austerity measures came out of the recession years ago and are now experiencing growth. They're also part of the same global economy so 1 can be disregarded as nonsensical. Obviously all countries are different but I'm making a general point that austerity in the UK caused rapid economic contraction and the result of that in the UK was that the debt actually increased. If you can provide reasons why that example doesn't apply elsewhere then feel free to bring them up, otherwise the UK experience is relevant to the decision facing the US. If the debt increased then how can you consider it austerity?
By reading the post. What you do is you look at the letters and make a string of sounds in your head to represent words like a picture that explains things to you.
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If you had even a basic understanding of economics you would be able to see how your own post contradicts itself. But clearly, you don't understand what austerity is, why it would be implemented, and what short and long term effects it would have on a given economy.
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On March 15 2013 01:37 JonnyBNoHo wrote:Show nested quote +On March 14 2013 18:12 McBengt wrote:On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase. It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages. There's also this problem: Link to blog articleLink to CBO reportMany people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits.
Thank you so much for posting this. The graph goes a long way towards proving the point of a poverty trap. Once your government assistance makes up so much of your income, then increasing your wage in a job you might get laid off/fired from does not make sense--you are giving up government assistance in its various forms which is guaranteed for something much less so.
This is all in addition to the many statistics cited about the wage gap as well. They rarely include non-wage government benefits. Also, it's the populist formula that is the tired, dead toss-around in public discussions. First, point at a large corporation's gross profit. Alternatively, point at CEO wages. Then, point at the hourly wage of its lowest paid employees, with an optional count of their total number. Lastly, well, you've already made your point, conclusion at this point is more than unnecessary! Optionally, assert that clearly they can afford to pay more to their employees. Explain this by your choice of 1) Greed 2) Power 3) Apathetic bottom-line gazing 4) Lack of compassion 5) Corporate fatcat culture 6) Political Power from profits.
No mention of the tens of millions helped by having cheaply made and sold products, including food. Hardly any throwback to making available millions of jobs for those with zero education, or those trying to save up money for their 2-year degree with this as their part time job. The tenuous connection is made between poorly skilled employees qualifying for state and federal assistance and the income that those skills command. They put corporations in the charity business instead of the profit business. If Walmart needed additional benefits and wages to attract responsible employees that show up to work, it would've been done years ago. Attention needs to be given to those failing public schools that don't turn out knowledgeable grads with their diplomas.
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On March 15 2013 07:51 Vegetarian wrote:
If you had even a basic understanding of economics you would be able to see how your own post contradicts itself. But clearly, you don't understand what austerity is, why it would be implemented, and what short and long term effects it would have on a given economy.
Wait, so you mean the efficacy of austerity relies on factors unrelated to the extent meaning of the term "austerity"? Why would you ask this
On March 15 2013 07:44 Vegetarian wrote:
If the debt increased then how can you consider it austerity?
then?
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Cayman Islands24199 Posts
On March 15 2013 07:55 Danglars wrote:Show nested quote +On March 15 2013 01:37 JonnyBNoHo wrote:On March 14 2013 18:12 McBengt wrote:On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase. It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages. There's also this problem: Link to blog articleLink to CBO reportMany people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits. Thank you so much for posting this. The graph goes a long way towards proving the point of a poverty trap. Once your government assistance makes up so much of your income, then increasing your wage in a job you might get laid off/fired from does not make sense
the entirety of the disincentive is from changes in income assistance received outside of the job. so this really has nothing to do with the core logic of raising income to overcome reservation wage by idle labor. it's an attenuating circumstance that might be true for a small portion.
of course whether this is a labor supply or demand problem is key. this makes the fact that wage labor drives consumption pretty important. the economy circulates money. demand(of stuff, not of labor) propped up by debt can only last for so long. you need workers to have money to sustain the virtuous cycle.
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On March 15 2013 08:08 oneofthem wrote:Show nested quote +On March 15 2013 07:55 Danglars wrote:On March 15 2013 01:37 JonnyBNoHo wrote:On March 14 2013 18:12 McBengt wrote:On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase. It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages. There's also this problem: Link to blog articleLink to CBO reportMany people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits. Thank you so much for posting this. The graph goes a long way towards proving the point of a poverty trap. Once your government assistance makes up so much of your income, then increasing your wage in a job you might get laid off/fired from does not make sense the entirety of the disincentive is from changes in income assistance received outside of the job. so this really has nothing to do with the core logic of raising income to overcome reservation wage by idle labor. it's an attenuating circumstance that might be true for a small portion. of course whether this is a labor supply or demand problem is key. this makes the fact that wage labor drives consumption pretty important. the economy circulates money. demand(of stuff, not of labor) propped up by debt can only last for so long. you need workers to have money to sustain the virtuous cycle.
The disincentive for attempting meaningful job advancement is much more than just outside of job income assistance. At the risk of repeating myself, the government assistance is virtually guaranteed as long as you persist in the same state of wages. Taking a better job that takes a lot more effort and responsibility might mean more money, but you also assume risk of losing the level of government assistance for the new income level. This all would be for a job you can get fired from, whereas benefits are guaranteed for your marriage state, kids, and income. Put in all that extra effort striving for the Walmart manager's job, secretary position, better retail job? Sounds like a bad deal to me.
I don't really know of a labor economics study describing of people discouraged from education advancement and job advancement from worry about losing their government benefits at great personal lifestyle cost. I get my personal Walmart check and can count on my CHIP, TANF, Medicaid, EITC and others. Why take on education responsibilities like night school, and the attendant loans, to prepare me for a job that pays me more money, with the guarantee that I lose most of those if I experience success? In a sense, this is a criticism of the current disincentivising welfare system as a whole, more than just a critique of the minimum wage system (for the full part, see + Show Spoiler [my previous post] +http://www.teamliquid.net/forum/postmessage.php?quote=3294&topic_id=383301
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On March 15 2013 07:51 Vegetarian wrote:
If you had even a basic understanding of economics you would be able to see how your own post contradicts itself. But clearly, you don't understand what austerity is, why it would be implemented, and what short and long term effects it would have on a given economy.
His argument (as I understand it) is pretty simple. A sudden cut in government spending when the country is already in a recession causes the economy to contract, which is why they call it austerity. When the economy contracts, automatic stabilisers (safety nets, progressive income tax) kick in that increase the deficit. Depending on the exact numbers, you can be back where you started on the debt, but with higher unemployment. There is no contradiction.
It's not hard to understand if you have a basic understanding of economics 
Edit: Unless you are arguing that austerity that doesn't decrease the debt is not austerity.
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Cayman Islands24199 Posts
On March 15 2013 08:37 Danglars wrote:Show nested quote +On March 15 2013 08:08 oneofthem wrote:On March 15 2013 07:55 Danglars wrote:On March 15 2013 01:37 JonnyBNoHo wrote:On March 14 2013 18:12 McBengt wrote:On March 14 2013 12:16 JonnyBNoHo wrote:On March 14 2013 12:01 {CC}StealthBlue wrote:On March 14 2013 10:58 ziggurat wrote:On March 14 2013 10:26 TheTenthDoc wrote:On March 14 2013 02:34 ziggurat wrote:
I think it's refreshing to see a politician standing up for his principles, even if they're not popular. I wish Romney had been more willing to do this. You realize that Paul Ryan is doing the opposite of standing up for principles here, right? The man is either lying through his teeth now or was lying the entire electoral season and during its immediate aftermath. He's either a hypocrite, an idiot, or a maliciously manipulative politician who relies on people not actually reading the things he says and just thinking "gee he's pretty." Saying whatever is popular at the moment is not "standing up" for anything but your own wallet. You sound like you're losing your mind over this. It's a proposed piece of legislation that will balance the budget in 10 years. It's not true or false, it's just a legislative proposal. Your last sentence sounds like you misread my post. I'm saying that Paul is standing up for the idea of making tough cuts to balance the budget, even though it's not popular. Obama, by contrast, is standing up for what's popular by proposing no tough cuts, raising the minimum wage, etc. Raising the minimum wage actually benefits the economy, and Paul Ryan isn't proposing any tough cuts in fact he mentions the savings of Obamacare and the extra revenue coming in from the increased taxes on the higher tiers of the tax bracket, he hates it but at the same wants to take credit for it. A tough cut would be to stop the subsidies for Big Agriculture, and taxing Wall St loopholes, while closing military bases in Europe. I doubt raising the minimum wage would help the economy. Most likely it would do a bit of harm. Some people will lose their jobs or get reduced hours. A lot of those that keep them will lose much of their added spending power through taxes / benefit reductions. We'd be better off reforming our poverty traps first. I'll agree with you on the tough cuts - I'd be happy to see those go along with additional military cuts and entitlement reforms. European economic history disagrees. Higher minimum wage tends to go hand in hand with increased growth. Businesses don't stop hiring or lay off employees because of higher minimum wages, that is a myth. Getting more people with spending capacity into the system easily outweighs the cost of the wage increase. It's not a myth. There's academic research to back it up. Some (not all) will cut back in one way or another which will offset some (or all, or more than all - we don't know ex-ante) of the gains from increased wages. There's also this problem: Link to blog articleLink to CBO reportMany people at or near minimum wage also receive government benefits. As the above chart shows, increasing their earnings will have little affect on their disposable income - it gets eaten away by taxes and lost benefits. Thank you so much for posting this. The graph goes a long way towards proving the point of a poverty trap. Once your government assistance makes up so much of your income, then increasing your wage in a job you might get laid off/fired from does not make sense the entirety of the disincentive is from changes in income assistance received outside of the job. so this really has nothing to do with the core logic of raising income to overcome reservation wage by idle labor. it's an attenuating circumstance that might be true for a small portion. of course whether this is a labor supply or demand problem is key. this makes the fact that wage labor drives consumption pretty important. the economy circulates money. demand(of stuff, not of labor) propped up by debt can only last for so long. you need workers to have money to sustain the virtuous cycle. The disincentive for attempting meaningful job advancement is much more than just outside of job income assistance. At the risk of repeating myself, the government assistance is virtually guaranteed as long as you persist in the same state of wages. Taking a better job that takes a lot more effort and responsibility might mean more money, but you also assume risk of losing the level of government assistance for the new income level. This all would be for a job you can get fired from, whereas benefits are guaranteed for your marriage state, kids, and income. Put in all that extra effort striving for the Walmart manager's job, secretary position, better retail job? Sounds like a bad deal to me. I don't really know of a labor economics study describing of people discouraged from education advancement and job advancement from worry about losing their government benefits at great personal lifestyle cost. I get my personal Walmart check and can count on my CHIP, TANF, Medicaid, EITC and others. Why take on education responsibilities like night school, and the attendant loans, to prepare me for a job that pays me more money, with the guarantee that I lose most of those if I experience success? In a sense, this is a criticism of the current disincentivising welfare system as a whole, more than just a critique of the minimum wage system (for the full part, see + Show Spoiler [my previous post] +http://www.teamliquid.net/forum/postmessage.php?quote=3294&topic_id=383301 )
i know there are various other income sensitive aids, but their mechanism of action on disincentive to work is all the same. that's why i generalized them to the same problem.
however, it's outside of the minimum wage's effect itself. raising the minimum wage does have the effect of increasing incentive to work for people who would not be bothered to do so if the wage level was lower.
teh implication is that if you raise minimum wage and make it work (that it is in some way 'enforced'), then you can reduce these aid programs.
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United States24740 Posts
On March 15 2013 05:23 ControlMonkey wrote:
I remember getting a pay rise and moving past a threshold in the low income tax offset and actually getting a small net pay cut as a result.
I can't speak for your country but this shouldn't happen, and wouldn't in mine. If you make more money, you get taxed at a higher rate only on the additional income above the threshold. That is unless you are talking about some special program and not raw income taxes.
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EPT
