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Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
On October 05 2013 11:25 Sub40APM wrote:Show nested quote +On October 05 2013 11:11 Introvert wrote:On October 05 2013 10:44 aksfjh wrote:On October 05 2013 10:28 Danglars wrote:On October 05 2013 09:17 {CC}StealthBlue wrote:Sen. Ted Cruz (R-TX), or "the joint speaker of the House" as Harry Reid calls him, argued Friday that Republicans have already offered Democrats a concession in their stand against reopening the government by demanding not a full repeal of Obamacare, but merely the defunding of President Barack Obama signature health law.
“The House of Representatives has repeatedly compromised already," said Cruz, who already who spoke against funding the law on the Senate floor for 21 hours earlier this month. "The House began -- it is the view of every Republican in this body, and indeed every Republican in the House, that Obamacare should be entirely and completely repealed. Nonetheless, the House started with a compromise of saying not repealing Obamacare but simply that it should be defunded.”
The White House and Democrats have so far moved in lockstep by refusing to negotiate with Republicans on any bill to fund the government or raise the debt limit that also includes language defunding Obamacare. House Republicans have offered to enter conference committee negotiations, but Democrats say any negotiation must come after the government is funded.
"Shutting down the government and threatening to not pay our nation’s bills when you don’t get everything you want isn’t ‘compromise’- it’s extortion," said Michael Czin, a spokesman for the Democratic National Committee, in a statement. Source Oddly missing from the piece (okay, not so odd considering the source is talkingpointsmemo) is the actual compromise. Boehner quickly moved from defunding it all to delaying it for a year the individual mandate, similar to what Obama did with a stroke of his pen in the one-year delay in the employer mandate. Boehner also vowed to cut the medical device tax. If you compare an entire defunding with one delay and one tax cut, that's pretty much giving away the barn on day two. It's Democrats refusing to compromise that far, not refusing to negotiate on language defunding Obamacare ... language not present in the latest compromise submitted. It's such a slanted piece. Reid makes his rare entry into the world of making good points by calling Reid the joint speaker of the House. It's been clear for a while that the House lacks a real leader; Cruz's push for action is a breath of fresh air in the GOP's leadership vacuum. When will you rubes get it from your ridiculously thick skulls (that I'm almost convinced that this point lacks room for a brain at all) that the employer mandate is NOT the same thing as the individual? The individual mandate is one of the pillars that keeps the law working. It's on the same level as the stipulations on preexisting conditions insurance providers face. I'm more angry that he simply changed it, he had no authority to do that. The law, as it was passed had that date. Statutory law, and he just said "eh, how about we wait until later?" It's almost as bad as his unconstitutional board appointments. Since a lack of government spending is actually hurting us, I'm going to make the wild jump to say that more of it would help. In fact, we have some pretty solid evidence that, during the current economic climate, the multiplier on (sensible) government spending is greater than 1. What that means is that for every $1 cut from government spending, we're subtracting more than $1 from the economy, while $1 in additional spending expands the economy by more than $1.
Also, there's not much difference in scale when it comes to stuff like monetary theory. There are some subtleties that come into play when your size gets large enough, but the issue with those "smaller countries that ran out of money" is that they ran out of money. Since we print/issue our own currency, that is not an issue. The same can be said for the UK, Japan, Australia, and Canada. What lack of spending? The government spends around what, 20+% of GDP? Hundreds of BILLIONS of dollars EVERY YEAR in stimulus, and you want more? They promised the stimulus THEN would drastically reduce the unemployment rate, fix the economy, etc. It didn't work then! It's insane to drive us deeper into the hole. Like I said, we might not know the exact effects, but EVERYONE agrees the debt and deficit need to be addressed. Our situation is different, but it's not entirely divorced from reality. We MUST stop at some point. So let me phrase it this way: when do we stop? How are we going to pay it back? We might as well wait it out! Apparently the amount of spending we need to get noticeable effects is astronomical and unsustainable. So just wait... On another note, it would be awesome if we actually started cutting the amount of government jobs and adding significant, full time private jobs. my main point is, this has to stop at some point. We are a large country and can do a lot of things other countries could only hope to do, but our abilities are not infinite. I honestly think it would help you understand modern economic more if you understood what national debt actually is. No, its not like your household spending, and your ability to repay your personal debts are not a relevant example of how a modern economy should treat debts no matter how hard conservatives try to spin it. Everyone agrees that the debt and the deficit has to be addressed at some point, but as liberals rightly pointed out addressing the debt in 2010 was foolish, and the stated conservative reason for why it had to be addressed then -- because it is unsustainable *now* and would lead to a financial collapse *now* -- was flat out wrong. It was a convenient political weapon to attack Obama on in the 2010 and 2012 election cycles. Even the basic economic underpinning for it -- the Rogoff/Reinhart paper that claimed that debt/gdp at 90% means something horrible will happen to the economy was proven to be at best partially derived from a simple mistake in their excel calculations and at the very worst an outright intellectual fraud. And the conservative 'solution' to too much debt-- of gutting the state and slashing taxes -- is not the answer, it will simply reproduce the same problems that we see in the PIGS. massive un employment + rising debt.
Yeah, the *now* aspect is important. I think a lot of people at this point have forgotten that the fiscal cliff and sequester weren't supposed to happen. They were supposed to prompt congress to come together and compromise and long term spending (entitlements) and tax reform.
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Cayman Islands24199 Posts
let's be serious. republicans are not intent on fixing entitlements in an intelligent manner. it's a matter of ideology for them.
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On October 05 2013 16:04 Sub40APM wrote:Show nested quote +On October 05 2013 14:27 Nevuk wrote:On October 05 2013 13:58 Introvert wrote:On October 05 2013 13:51 Nevuk wrote:The 80s recession was nothing on the scale of the current one... the current one is dubbed the Great Recession as the most recent economic event that was comparable was the Great Depression ( most economists agree that without the government intervention and stimulus of Bush/Obama we would be in another depression. Same as most economists don't think that cutting back spending during the great depression helped anything (but there are some who do think that- this isn't like the global warming or evolution debates, there's actual evidence for both sides to argue about rather than one just being laughed out of the room). The 80s one was probably smaller than the dotcom bust. Unless you meant the 1880s recessions. The economist most well-known popularly currently is Paul Krugman who is a polarizing figure to say the least, but quite prolific. Also there was a massive lie/spreadsheet mistake in a very influential paper about deficit and GDP ratios that was discovered fairly recently (not discovered by Krugman - it was accidentally figured out by an MIT econ student) - http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html Fair enough. I know there is debate about the 30s. My area of interest is the Constitution. I was always more interested in the legality of what FDR did then the economics of what he did. But I did know it was debated. if I stick around the thread I'd be ok with sticking to Constitutional topics, for the most part. But when everyone says you have a problem... it prompts me to believe we have a problem. As to Paul Krugman... I kind of had a feeling this is where you got most of your info. I'd say polarizing is certainly the the nicest you could be about it. And he is quite far left. Do you read any right leaning economists? I'm trying to get a mix here. I've only heard of that 90% study once, but that's not what I was basing my statements on. I still think the rest of what I've said seems reasonable, at the very least. Krugman is a good rhetorician but he's not exactly an intellectual heavyweight of the likes of Chomsky or Foucault (hell I would even throw in Buckley for a conservative voice here are you serious? You realize that Krugman the blogger and Krugman the economist are two very different people, and that Krugman the economist has made a pretty serious contribution to the study of economists, his impact on the study of economists.
I appreciate your responses, but do you have any citations? Or should I should go read a whole bunch of Krugman? (This is only semi-sarcastic.) As has already been said, this whole thing is ideological on both sides, so I want to know where I can find what you are telling me. Like when you mention we are gaining more jobs, and leave it at that, it ignores so much (part time vs full, gov vs private, etc. hours worked, etc). From what I've heard lots of the stimulus is being held by the banks not doing anything... You keep saying I'm factually wrong, but where are these facts? the biggest problem I have is that all these liberal economists (and others) say that such and so is going to happen (or not happen), we are going to get this much of this, etc, and they are wrong in the end. I mean, they went from "this is going to help" to "this is going to make sure it doesn't get worse!" When these same people who whined at Bush's small debt in a good economy advocate a bigger one in a bad economy, it leaves me scratching my head.
I mean, this graph seems to contradict at least one thing you said just now.
Edit: and this is th CBO, not fear mongering Repubs:
"The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past." The rest of this warning comes at the bottom of the link. We cannot keep doing what we are doing.
It's not that I don't entirely believe you, it's just that I don't know where you are getting this from. Do you have multiple, varied sources, or just two? I do admit this, this is piquing my interest in the subject.
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I'm no economics expert, but here's how I understand it. Krugman's argument is that the stimulus wasn't large enough. Whether he is right or not is anyone's guess, but what also matters is how the money was spent. Let's not forget that many concessions were made with Republicans on this. Over 1/3 of it was tax cuts/incentives. That it didn't "trickle down" is not something you can place blame on the Dems for. I don't think any serious economist can say that it wasn't necessary or that it didn't save us from a much worse fate though.
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2nd Worst City in CA8938 Posts
Lawmakers reported for duty on Capitol Hill on the fifth day of a federal government shutdown, convening for an unusual Saturday session with little hope of resolving the bitter budget standoff between the two parties. The major legislative item for the day is a bill on the House floor that would give furloughed federal workers back pay once the shutdown is over. The legislation passed swiftly on Saturday morning, 407-0, and the White House has also endorsed the bill. But later Saturday, Senate Majority Leader Harry Reid (D-Nev.) ripped the the House GOP for offering a “paid vacation” for federal workers while also refusing to reopen the government. The Senate may yet take up the House bill, but aides timing is in flux. Senators from Maryland and Virginia — states with high numbers of federal workers — have introduced a bill in the Senate to do the same. “Great news House passed our bill to guarantee back pay for fed workers. Ready to pass in Senate,” Sen. Tim Kaine (D-Va.) said on Twitter. More than 800,000 federal workers have been furloughed due to the shutdown that began Tuesday. Another non-binding resolution, considered under a parliamentary procedure requiring a two-thirds majority to pass, will allow military chaplains to continue to provide religious services during the shutdown. All House lawmakers except Rep. Bill Enyart (D-Ill.) voted in favor of the legislation. House Minority Leader Nancy Pelosi (D-Calif.) and House Minority Whip Steny Hoyer (D-Md.) tried to track down Enyart or his aides to see why he voted against the resolution, according to leadership aides, but the vote ended and he was still registered as a “no” vote. Later Saturday morning, House leadership in both parties held dueling press conferences on the government shutdown, ramping up the blame game but leaving Congress no closer to a resolution. Read more: http://www.politico.com/story/2013/10/government-shutdown-saturday-97872.html?hp=l1
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On October 06 2013 04:06 Introvert wrote:Show nested quote +On October 05 2013 16:04 Sub40APM wrote:On October 05 2013 14:27 Nevuk wrote:On October 05 2013 13:58 Introvert wrote:On October 05 2013 13:51 Nevuk wrote:The 80s recession was nothing on the scale of the current one... the current one is dubbed the Great Recession as the most recent economic event that was comparable was the Great Depression ( most economists agree that without the government intervention and stimulus of Bush/Obama we would be in another depression. Same as most economists don't think that cutting back spending during the great depression helped anything (but there are some who do think that- this isn't like the global warming or evolution debates, there's actual evidence for both sides to argue about rather than one just being laughed out of the room). The 80s one was probably smaller than the dotcom bust. Unless you meant the 1880s recessions. The economist most well-known popularly currently is Paul Krugman who is a polarizing figure to say the least, but quite prolific. Also there was a massive lie/spreadsheet mistake in a very influential paper about deficit and GDP ratios that was discovered fairly recently (not discovered by Krugman - it was accidentally figured out by an MIT econ student) - http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html Fair enough. I know there is debate about the 30s. My area of interest is the Constitution. I was always more interested in the legality of what FDR did then the economics of what he did. But I did know it was debated. if I stick around the thread I'd be ok with sticking to Constitutional topics, for the most part. But when everyone says you have a problem... it prompts me to believe we have a problem. As to Paul Krugman... I kind of had a feeling this is where you got most of your info. I'd say polarizing is certainly the the nicest you could be about it. And he is quite far left. Do you read any right leaning economists? I'm trying to get a mix here. I've only heard of that 90% study once, but that's not what I was basing my statements on. I still think the rest of what I've said seems reasonable, at the very least. Krugman is a good rhetorician but he's not exactly an intellectual heavyweight of the likes of Chomsky or Foucault (hell I would even throw in Buckley for a conservative voice here are you serious? You realize that Krugman the blogger and Krugman the economist are two very different people, and that Krugman the economist has made a pretty serious contribution to the study of economists, his impact on the study of economists. I appreciate your responses, but do you have any citations? Or should I should go read a whole bunch of Krugman? (This is only semi-sarcastic.) As has already been said, this whole thing is ideological on both sides, so I want to know where I can find what you are telling me. Like when you mention we are gaining more jobs, and leave it at that, it ignores so much (part time vs full, gov vs private, etc. hours worked, etc).
Yes, but not at my finger tips. Let me get it together and Ill post it later this weekend. Here is a wonky argument by Summers and DeLong: http://delong.typepad.com/sdj/2012/03/delong-and-summers-fiscal-policy-in-a-depressed-economy-conference-draft.html
But just as a couple of graphs I was looking at for other things and wanted to share with you. Here is the number of employees of the federal government. As you can see the trend line under Obama has been down, except for those brief spikes in US Census: http://research.stlouisfed.org/fred2/series/CES9091000001?cid=32325
And here is one attempt at quantifying the real interest rate, via the 10 year inflation indexed bond by the treasury. As you can see, we were in a prolonged period of disinflation, and for a smaller period in an outright deflation. Which was actually a pretty terrible position to be in.
From what I've heard lots of the stimulus is being held by the banks not doing anything...
Yes and no. The quality of the stimulus has affected its effacy. Because so much of it was either in tax cuts or low interest, THAT stimulus was captured in the banking system and has not left it. Which yes, is one of the reasons why the conservative response to the recession was relatively ineffective. The banking system for all intents and purposes was broke, and continues to be so, which is damaging the transmission mechanism the wider economy uses
You keep saying I'm factually wrong, but where are these facts? the biggest problem I have is that all these liberal economists (and others) say that such and so is going to happen (or not happen), we are going to get this much of this, etc, and they are wrong in the end. I mean, they went from "this is going to help" to "this is going to make sure it doesn't get worse!"
Well, that is an issue of communiations. Christina Romer was the author of the stimulus analysis, she said there was a need for 1.6 trillion dollars in Stimulus. Barrack Obama chose to not to listen to her because he thought it was politically impossible to pass a stimulus measure that large so he settled for a much smaller stimulus and still kept Romers talking points. The Republicans than successfully interpreted this as "it was a lie!" instead of an "Obama shot himself in the foot"
When these same people who whined at Bush's small debt in a good economy advocate a bigger one in a bad economy, it leaves me scratching my head.
Because the economy was in a different state. When Bush found the economy with a relatively low unemployment rate and a relatively strong GDP growth that was the time to pay down debt. Instead he choose to pay a large tax cuts and then borrowed a lot of money for his war in Iraq. When Obama found the economy it was in the middle of a financial crisis.
I mean, this graph seems to contradict at least one thing you said just now. Edit: and this is th CBO, not fear mongering Repubs: "The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past." The rest of this warning comes at the bottom of the link. We cannot keep doing what we are doing.
Right, but if you read the report it notes that debt will decline until 2018, when it will start again to rise. In other words, today is time to fix the unemployment issues and 2016 should be the election on fixing the structural issues in the economy, including a better way to pay for medicine
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On October 05 2013 14:35 Introvert wrote:Show nested quote +On October 05 2013 14:27 Nevuk wrote:On October 05 2013 13:58 Introvert wrote:On October 05 2013 13:51 Nevuk wrote:The 80s recession was nothing on the scale of the current one... the current one is dubbed the Great Recession as the most recent economic event that was comparable was the Great Depression ( most economists agree that without the government intervention and stimulus of Bush/Obama we would be in another depression. Same as most economists don't think that cutting back spending during the great depression helped anything (but there are some who do think that- this isn't like the global warming or evolution debates, there's actual evidence for both sides to argue about rather than one just being laughed out of the room). The 80s one was probably smaller than the dotcom bust. Unless you meant the 1880s recessions. The economist most well-known popularly currently is Paul Krugman who is a polarizing figure to say the least, but quite prolific. Also there was a massive lie/spreadsheet mistake in a very influential paper about deficit and GDP ratios that was discovered fairly recently (not discovered by Krugman - it was accidentally figured out by an MIT econ student) - http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html Fair enough. I know there is debate about the 30s. My area of interest is the Constitution. I was always more interested in the legality of what FDR did then the economics of what he did. But I did know it was debated. if I stick around the thread I'd be ok with sticking to Constitutional topics, for the most part. But when everyone says you have a problem... it prompts me to believe we have a problem. As to Paul Krugman... I kind of had a feeling this is where you got most of your info. I'd say polarizing is certainly the the nicest you could be about it. And he is quite far left. Do you read any right leaning economists? I'm trying to get a mix here. I've only heard of that 90% study once, but that's not what I was basing my statements on. I still think the rest of what I've said seems reasonable, at the very least. I would honestly say the largest influences on my economic thought are from Nate Silver and some obscure left-anarchist figures like Emma Goldman or Kropotkin. Most of my current info probably is from Silver or links/tweets he posted. My life got really hectic so I haven't really followed the political scene closely from June til now (also, the politics were boring). I actually prefer this article regarding the 90% thing to Krugman's op-ed on it but couldn't find it rapidly - (basically it's Amherst economic professors v Harvard ones on the topic). http://www.nytimes.com/2013/04/30/opinion/debt-and-growth-a-response-to-reinhart-and-rogoff.htmlI actually think Krugman lucked out and is just a very cynical person who happened to be proclaiming doom loudly from a position where he would be recognized for it (many many others saw this coming, Nate Silver's book outlines just how obvious it was quite well, and despite Silver's liberal leanings it's mostly a fairly politics-neutral book). Krugman is a good rhetorician but he's not exactly an intellectual heavyweight of the likes of Chomsky or Foucault (hell I would even throw in Buckley for a conservative voice here) and is guilty of some of the stuff he gripes about others for (it's at best wild speculation to say that Reinhart-roganoff made Greece's situation worse - what, do Greek politicians really read Harvard economic papers?). I mostly actually read reactions to his stuff, or when he brings something I find interesting like the 90% study to popular attention. I'll admit economics isn't my strong suit but I do like to read at least some theorists and listen to those who have studied it. I think the Austrian or Chicago school of economics would be more what is in line with your thinking. Probably not Milton Friedman far, but he's a key figure. He's the only Chicago school who has a work that I've personally read in detail. The chicago school is obviously the most heavily debated in America but the Austrian one is rather influential and attracts more vitriol from someone like Krugman (it's also been around a lot longer). The efficient-market theory is probably the largest link between the two and the most heavily criticized. They're really more complex than the wikipedia articles make them out to be but the wikipedia articles are decent enough and it would be silly to make a list when there's one right there. Also the Austrian school just has too damn many to list - http://en.wikipedia.org/wiki/Chicago_school_of_economics (At least two of their prominent figures won nobel prizes in the 90s and Friedman won one in the 70s) http://en.wikipedia.org/wiki/Austrian_School ok, I know a little more than that lol. I know of Friedman, as well as general principles of Austrian and Chicago thought. But I find the particulars of economics boring, and politics interesting  Nate Silver knows his stats, I'll give him that. I just don't have time to read all the things on my list of stuff to get to. Specifically right now, with so much going on in America, it's hard to really go back to history while keeping up with current events. At least you openly admitted to politics in economics, which seems like more than many would do. Edit: as did sub40. I'll be bookmarking this for later, thank you.
As a Marxist would say, Politics and Economics cannot be separated.
That being said, Economics today does not currently field any major schools of thought. While there are a few Austrians who stubbornly refuse and reject modern econometric methodologies (and at present, I can't even think of a major economics department with a Austrian majority since GMU shifted away, maybe 6-12 universities with a plurality), the profession with that exception all use the same neoclassical tools and models, and the writings of Keynes, Hayek, and Friedman were all digested decades ago, and new, important concepts and models have come up in the interim (imperfect information, signaling theory, Richardian equivalence, Game theory, etc), which make their critiques, while highly influential and important groundwork, relatively obsolete.
That being said, Economists do often disagree as to the general values of certain variables. For instance, the one surefire way to determine the general recommendations an economist would make is to ask them to value price elasticity (the rate at which the price of goods and services react to shifts in the market). The closer the more responsive they view prices are to changes in the market, the more "free market" recommendations they are likely to make (vice versa if they view prices as responding slower). Though again, it's all in the same model frameworks and assumptions.
That does not preclude politicians from politicizing economics, but they generally avoid discussing the actual concepts in favor of buzzwords. No one's going to listen to them if they attempt to explain (or understand) the effects of NAFTA on Mexico-US migration as a result of factor-price equalization versus labor models of migration and unemployment, for instance, or the Ricardian principles of trade and comparative advantage. Instead, they'll tell you that NAFTA will create more jobs.
Or, for instance, Ron Paul advocating for a return of the US to the gold standard. That was the most hilarious and saddest thing I ever saw, mostly because of all the people who thought it was/think it is a good thing.
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This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech.
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On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech. Austerity is a fiction, real gdp spending has gone up in each country. The growth has stalled somewhat, but thats not austerity by any stretch of the imagination. No matter how much feverish socialists may like to pretend.
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You can argue for austerity from a neo-classical perspective instead of an austrian perspective, Rogoff . As for Germany, the government isn't following Austrian economic policies, just a mix of neo-classical and neo-liberalism, the reputation they get for being so focused on austery is for forcing it on other countries, not at home. The germans in no way advocate market solutions for every problem, at least not in their own country. For the germans, one of the main driving forces for austerity in the south is the way their own electorate sees the south as 'lazy' and underserving of aid because they caused their problems themselves (which is at least partially true).
The greek government didn't choose austerity, it was forced on them by the troika, the EU (dominated by germany) and shaped by the IMF, the opinions of which have always been extremely pro-market.
On October 06 2013 10:23 Dazed_Spy wrote:Show nested quote +On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech. Austerity is a fiction, real gdp spending has gone up in each country. The growth has stalled somewhat, but thats not austerity by any stretch of the imagination. No matter how much feverish socialists may like to pretend.
Tell that to the people in Greece afflicted by malaria because they don't have the money to spray anymore.
![[image loading]](http://i.imgur.com/8tOqKP3.jpg)
You'd see a similar picture in plenty of european countries.
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On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech.
Yes it was mostly us Germans, and austerity is a pretty bad idea (in a crisis). And it's a pretty easy to explain why. For every dollar the government spends on paying their debt, they're not spending a dollar investing in the economy. Because of this, by definition, paying debts will paradoxically not reduce your debt in percentage of GDP. And because of the money not invested by your government also increases unemployment, lowers investments, and reduces consumption, for every dollar that goes into debt- payments, your economy shrinks even more, by a factor >1, often times austerity costs a country 2 or 3 dollars per dollar payed back.
So even if austerity measures reduce a countries absolute debt, they will increase a countries debt in % of GDP. Take Greece as an example. Their GDP is now 25% smaller than it was before the crisis, but their debt is sitting at 160% of the GDP.
Of course all of this doesn't mean that you never should pay your debts back, it only means that in the short term, paying your debts back actually increases them, so you should only do that when you can afford it.
And i'm not so sure if the US government has taken strong austerity measures, they actually seem to spent quite a big amount of money.
And the reason why it's so popular is probably because it's so intuitive. People treat national debt like if it was their own private loan."Hey, if i pay my debts this month, i'll have a lot of money next month, and i'll be rid of all my debts!"
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whats wrong with those terribly (and purposefully misleading) scaled charts? Not the first one in this thread...
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On October 06 2013 10:28 Derez wrote:
For the germans, one of the main driving forces for austerity in the south is the way their own electorate sees the south as 'lazy' and underserving of aid because they caused their problems themselves (which is at least partially true).
The greek government didn't choose austerity, it was forced on them by the troika, the EU (dominated by germany) and shaped by the IMF, the opinions of which have always been extremely pro-market.
Looking at German public polls about their opinion towards those troubled nations you will see quite big differences between those nations. No one cares (or complains) about helping out Ireland. Many people are scared, if Germany can guarantee Spain or Italy, without damaging itself. But still most ppl strongly agree on helping out those.
Only when it comes to Greece, the public opinion gets very negative. Most don't believe that those in power and their drains of corruption have changed at all and thus oppose funding those, that ruined Greece. It may also not help their image, that they are only part of the Euro, because they faked their financial statistics for years. It is like when someone pretends to be a GM-player, gets part of the clan, is fielded in a clanwar and it turns out he is Bronze. Unlike in esports here you can't just remove the faker from the roster without further damage but have to field him every clanwar again and again. (even though there are supporters of letting Greece drop out of the euro) And also many feel slightly disturbed by things like http://www.forbes.com/sites/walterloeb/2012/06/17/retirement-in-germany-may-rise-to-age-69-while-greece-is-at-age-58/ because those changes were/are not popular in germany at all. (as you can imagine)
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On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech.
You can see above, but also:
Because "Austerity" is not an exclusive Austrian recommendation. The Austrian school eschews macroeconomic analysis and econometric and statistical tools of analysis, which is what distinguishes it specifically from modern mainstream economics. Here's a good essay explaining why Austrian economics is no longer relevant, but let's also tackle your point about the 2008 recession.
In regards to Greece, Ireland, Spain, and Portugal, the constraints of monetary union demands austerity as the only actual course of action during a recession given previously high rates of debt. You can look up the economic trilemma, but in short, due to the nature of monetary union, individual countries have no choice but to give up monetary policy (raising interest rates, devaluing currency, etc.) as a course of action in response to recessions, instead relying on counter-cyclical fiscal policies to combat it. Comparatively speaking, countries such as France which had more fiscal discipline prior to the recession were able to maintain expenditure levels or implement counter-cyclical fiscal policies (eg. the Stimulus Package) which were not an option for the "PIGS" (and the only real response they had within the constraints of monetary union was austerity). If we're discussing Germany, it's because historical experience with hyperinflation in the Weimar era, and post WWII inflation, all colored German fears of inflation, and thus resulted in a strong institutional culture of fiscal discipline. Something that is needed in Washington, but I digress. In a monetary union ala the Eurozone, fiscal discipline is absolutely necessary due to the lack of a monetary policy, and countries entering into it both knew it and had to pass a series of hoops demonstrating such. The issue was that with Greece, there was alot of shady behind-the-scenes accounting tricks and general mismanagement of the budget to obscure its economic and fiscal problems to allow it to enter the Eurozone, when it would otherwise have been rejected based on those criteria (stable, low interest rates, deficit not exceeding 3% of GDP, etc).
Furthermore, austerity was not the response in countries outside of the "PIGS". Stimulus was the order of the day during the recession as countries used public spending to pick up the slack for private spending, if their country was financially capable of it. China, for instance, pumped massive amounts of money into infrastructure and other stimulus projects. That being said, Rogoff's paper is not groundbreaking, though it is controversial for several reason (its politicization and methodological flaws, also the inferences of causation). While it has provided fuel for the austerity fire (and to a degree necessary: lowering debt levels and stabilizing the deficit in the US is an important medium-/long- term goal, but not yet), pre-existing calls in the US stemmed from the sharp rise in Bush-era budgets (as a result of Iraq/Afghanistan and tax cuts) after the surplus that was developed during the 1990s, and general ideological arguments against the stimulus. Furthermore, the Rogoff paper is an example of a neo-classical/mainstream critique of debt. It is not Austrian in any way shape or form. If it uses econometrics and macroeconomic methodologies, then it ain't Austrian, which simply illustrates that austerity is not an Austrian concept.
On October 06 2013 11:08 mahrgell wrote:Show nested quote +On October 06 2013 10:28 Derez wrote:
For the germans, one of the main driving forces for austerity in the south is the way their own electorate sees the south as 'lazy' and underserving of aid because they caused their problems themselves (which is at least partially true).
The greek government didn't choose austerity, it was forced on them by the troika, the EU (dominated by germany) and shaped by the IMF, the opinions of which have always been extremely pro-market.
Looking at German public polls about their opinion towards those troubled nations you will see quite big differences between those nations. No one cares (or complains) about helping out Ireland. Many people are scared, if Germany can guarantee Spain or Italy, without damaging itself. But still most ppl strongly agree on helping out those. Only when it comes to Greece, the public opinion gets very negative. Most don't believe that those in power and their drains of corruption have changed at all and thus oppose funding those, that ruined Greece. It may also not help their image, that they are only part of the Euro, because they faked their financial statistics for years. It is like when someone pretends to be a GM-player, gets part of the clan, is fielded in a clanwar and it turns out he is Bronze. Unlike in esports here you can't just remove the faker from the roster without further damage but have to field him every clanwar again and again. (even though there are supporters of letting Greece drop out of the euro) And also many feel slightly disturbed by things like http://www.forbes.com/sites/walterloeb/2012/06/17/retirement-in-germany-may-rise-to-age-69-while-greece-is-at-age-58/ because those changes were/are not popular in germany at all. (as you can imagine)
Basically. The issue with Greece is that they fudged their economic and fiscal statistics both to get into the Eurozone and while it stayed in the Eurozone. Now, in general this isn't the fault of the public, but the Greek public is paying the price of years of poor governance and lack of transparency, which makes bailing out Greece a very difficult situation.
EDIT: It's also fascinating to watch the dual nature of Krugman, though I suppose he's embraced the fundamental disconnect of being both an Nobel-winning academic and a blogger/pundit for the masses.
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+ Show Spoiler +On October 06 2013 08:51 Sub40APM wrote:Show nested quote +On October 06 2013 04:06 Introvert wrote:On October 05 2013 16:04 Sub40APM wrote:On October 05 2013 14:27 Nevuk wrote:On October 05 2013 13:58 Introvert wrote:On October 05 2013 13:51 Nevuk wrote:The 80s recession was nothing on the scale of the current one... the current one is dubbed the Great Recession as the most recent economic event that was comparable was the Great Depression ( most economists agree that without the government intervention and stimulus of Bush/Obama we would be in another depression. Same as most economists don't think that cutting back spending during the great depression helped anything (but there are some who do think that- this isn't like the global warming or evolution debates, there's actual evidence for both sides to argue about rather than one just being laughed out of the room). The 80s one was probably smaller than the dotcom bust. Unless you meant the 1880s recessions. The economist most well-known popularly currently is Paul Krugman who is a polarizing figure to say the least, but quite prolific. Also there was a massive lie/spreadsheet mistake in a very influential paper about deficit and GDP ratios that was discovered fairly recently (not discovered by Krugman - it was accidentally figured out by an MIT econ student) - http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html Fair enough. I know there is debate about the 30s. My area of interest is the Constitution. I was always more interested in the legality of what FDR did then the economics of what he did. But I did know it was debated. if I stick around the thread I'd be ok with sticking to Constitutional topics, for the most part. But when everyone says you have a problem... it prompts me to believe we have a problem. As to Paul Krugman... I kind of had a feeling this is where you got most of your info. I'd say polarizing is certainly the the nicest you could be about it. And he is quite far left. Do you read any right leaning economists? I'm trying to get a mix here. I've only heard of that 90% study once, but that's not what I was basing my statements on. I still think the rest of what I've said seems reasonable, at the very least. Krugman is a good rhetorician but he's not exactly an intellectual heavyweight of the likes of Chomsky or Foucault (hell I would even throw in Buckley for a conservative voice here are you serious? You realize that Krugman the blogger and Krugman the economist are two very different people, and that Krugman the economist has made a pretty serious contribution to the study of economists, his impact on the study of economists. I appreciate your responses, but do you have any citations? Or should I should go read a whole bunch of Krugman? (This is only semi-sarcastic.) As has already been said, this whole thing is ideological on both sides, so I want to know where I can find what you are telling me. Like when you mention we are gaining more jobs, and leave it at that, it ignores so much (part time vs full, gov vs private, etc. hours worked, etc). Yes, but not at my finger tips. Let me get it together and Ill post it later this weekend. Here is a wonky argument by Summers and DeLong: http://delong.typepad.com/sdj/2012/03/delong-and-summers-fiscal-policy-in-a-depressed-economy-conference-draft.htmlBut just as a couple of graphs I was looking at for other things and wanted to share with you. Here is the number of employees of the federal government. As you can see the trend line under Obama has been down, except for those brief spikes in US Census: http://research.stlouisfed.org/fred2/series/CES9091000001?cid=32325And here is one attempt at quantifying the real interest rate, via the 10 year inflation indexed bond by the treasury. As you can see, we were in a prolonged period of disinflation, and for a smaller period in an outright deflation. Which was actually a pretty terrible position to be in. Show nested quote +
From what I've heard lots of the stimulus is being held by the banks not doing anything...
Yes and no. The quality of the stimulus has affected its effacy. Because so much of it was either in tax cuts or low interest, THAT stimulus was captured in the banking system and has not left it. Which yes, is one of the reasons why the conservative response to the recession was relatively ineffective. The banking system for all intents and purposes was broke, and continues to be so, which is damaging the transmission mechanism the wider economy uses Show nested quote +
You keep saying I'm factually wrong, but where are these facts? the biggest problem I have is that all these liberal economists (and others) say that such and so is going to happen (or not happen), we are going to get this much of this, etc, and they are wrong in the end. I mean, they went from "this is going to help" to "this is going to make sure it doesn't get worse!"
Well, that is an issue of communiations. Christina Romer was the author of the stimulus analysis, she said there was a need for 1.6 trillion dollars in Stimulus. Barrack Obama chose to not to listen to her because he thought it was politically impossible to pass a stimulus measure that large so he settled for a much smaller stimulus and still kept Romers talking points. The Republicans than successfully interpreted this as "it was a lie!" instead of an "Obama shot himself in the foot" Show nested quote +
When these same people who whined at Bush's small debt in a good economy advocate a bigger one in a bad economy, it leaves me scratching my head.
Because the economy was in a different state. When Bush found the economy with a relatively low unemployment rate and a relatively strong GDP growth that was the time to pay down debt. Instead he choose to pay a large tax cuts and then borrowed a lot of money for his war in Iraq. When Obama found the economy it was in the middle of a financial crisis. Show nested quote +I mean, this graph seems to contradict at least one thing you said just now. Edit: and this is th CBO, not fear mongering Repubs: "The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past." The rest of this warning comes at the bottom of the link. We cannot keep doing what we are doing. Right, but if you read the report it notes that debt will decline until 2018, when it will start again to rise. In other words, today is time to fix the unemployment issues and 2016 should be the election on fixing the structural issues in the economy, including a better way to pay for medicine
ok, I eagerly await. You have done much for my perspective. Although I'm still concerned/questioning. I do really like sources though, especially for this type of thing, since it seems more of a mental exercise than a reading of data, considering how complicated everything is.
1.) Why believe the same people who failed to predict the 2008 crisis? (Unless they did, but my understanding is that the large majority of economists missed it). I know the Fed said there wasn't a problem until the problem occurred.
2.) What is track record for heavy government intervention vs very little government intervention? Especially, which one is relevant? That's actually the better question, from what I know about the past and what has been discussed so far. You gave me all these reasons why events in other time periods are not relevant, so where is the history for both the view that turned out to be wrong and the one that turned out to be right? How much of this is guesstimation?
The best part is going to be where, 10 years from now we look back and say "welp, we were wrong about that!"
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On October 06 2013 11:15 Lord Tolkien wrote:Show nested quote +On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech. Comparatively speaking, countries such as France which had more fiscal discipline prior to the recession were able to maintain expenditure levels or implement counter-cyclical fiscal policies (eg. the Stimulus Package) which were not an option for the "PIGS" (and the only real response they had within the constraints of monetary union was austerity). .
That isnt true for Spain.You had stories like this from the FT celebrating Spain all the way into 07 even as the credit markets started to freeze up.
http://www.ft.com/intl/cms/s/0/057d3078-c753-11db-8078-000b5df10621.html#axzz2gp0LpbYr
"Spain on Wednesday confirmed its position as one of the healthiest economies in Europe by reporting a public sector budget surplus of 1.8 per cent of gross domestic product in 2006, its highest for 30 years."
The problem was that Spain was running a massive current account deficit vs Germany, and once Germans stopped recycling their savings into Spanish real estate/bonds that ended. France was comparatively better off because it had a more balanced trade/capital inflows. The better of Northern countries were basically inputs into the German export machine which is why all of them were ok too. But the EU mechanism was broken in a different way anyway, both Germany and France repeatedly violated the stability and growth pact whenever it suited them and the EU simply didnt have the muscle to do anything about it.
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On October 06 2013 11:44 Introvert wrote:+ Show Spoiler +On October 06 2013 08:51 Sub40APM wrote:Show nested quote +On October 06 2013 04:06 Introvert wrote:On October 05 2013 16:04 Sub40APM wrote:On October 05 2013 14:27 Nevuk wrote:On October 05 2013 13:58 Introvert wrote:On October 05 2013 13:51 Nevuk wrote:The 80s recession was nothing on the scale of the current one... the current one is dubbed the Great Recession as the most recent economic event that was comparable was the Great Depression ( most economists agree that without the government intervention and stimulus of Bush/Obama we would be in another depression. Same as most economists don't think that cutting back spending during the great depression helped anything (but there are some who do think that- this isn't like the global warming or evolution debates, there's actual evidence for both sides to argue about rather than one just being laughed out of the room). The 80s one was probably smaller than the dotcom bust. Unless you meant the 1880s recessions. The economist most well-known popularly currently is Paul Krugman who is a polarizing figure to say the least, but quite prolific. Also there was a massive lie/spreadsheet mistake in a very influential paper about deficit and GDP ratios that was discovered fairly recently (not discovered by Krugman - it was accidentally figured out by an MIT econ student) - http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html Fair enough. I know there is debate about the 30s. My area of interest is the Constitution. I was always more interested in the legality of what FDR did then the economics of what he did. But I did know it was debated. if I stick around the thread I'd be ok with sticking to Constitutional topics, for the most part. But when everyone says you have a problem... it prompts me to believe we have a problem. As to Paul Krugman... I kind of had a feeling this is where you got most of your info. I'd say polarizing is certainly the the nicest you could be about it. And he is quite far left. Do you read any right leaning economists? I'm trying to get a mix here. I've only heard of that 90% study once, but that's not what I was basing my statements on. I still think the rest of what I've said seems reasonable, at the very least. Krugman is a good rhetorician but he's not exactly an intellectual heavyweight of the likes of Chomsky or Foucault (hell I would even throw in Buckley for a conservative voice here are you serious? You realize that Krugman the blogger and Krugman the economist are two very different people, and that Krugman the economist has made a pretty serious contribution to the study of economists, his impact on the study of economists. I appreciate your responses, but do you have any citations? Or should I should go read a whole bunch of Krugman? (This is only semi-sarcastic.) As has already been said, this whole thing is ideological on both sides, so I want to know where I can find what you are telling me. Like when you mention we are gaining more jobs, and leave it at that, it ignores so much (part time vs full, gov vs private, etc. hours worked, etc). Yes, but not at my finger tips. Let me get it together and Ill post it later this weekend. Here is a wonky argument by Summers and DeLong: http://delong.typepad.com/sdj/2012/03/delong-and-summers-fiscal-policy-in-a-depressed-economy-conference-draft.htmlBut just as a couple of graphs I was looking at for other things and wanted to share with you. Here is the number of employees of the federal government. As you can see the trend line under Obama has been down, except for those brief spikes in US Census: http://research.stlouisfed.org/fred2/series/CES9091000001?cid=32325And here is one attempt at quantifying the real interest rate, via the 10 year inflation indexed bond by the treasury. As you can see, we were in a prolonged period of disinflation, and for a smaller period in an outright deflation. Which was actually a pretty terrible position to be in. Show nested quote +
From what I've heard lots of the stimulus is being held by the banks not doing anything...
Yes and no. The quality of the stimulus has affected its effacy. Because so much of it was either in tax cuts or low interest, THAT stimulus was captured in the banking system and has not left it. Which yes, is one of the reasons why the conservative response to the recession was relatively ineffective. The banking system for all intents and purposes was broke, and continues to be so, which is damaging the transmission mechanism the wider economy uses Show nested quote +
You keep saying I'm factually wrong, but where are these facts? the biggest problem I have is that all these liberal economists (and others) say that such and so is going to happen (or not happen), we are going to get this much of this, etc, and they are wrong in the end. I mean, they went from "this is going to help" to "this is going to make sure it doesn't get worse!"
Well, that is an issue of communiations. Christina Romer was the author of the stimulus analysis, she said there was a need for 1.6 trillion dollars in Stimulus. Barrack Obama chose to not to listen to her because he thought it was politically impossible to pass a stimulus measure that large so he settled for a much smaller stimulus and still kept Romers talking points. The Republicans than successfully interpreted this as "it was a lie!" instead of an "Obama shot himself in the foot" Show nested quote +
When these same people who whined at Bush's small debt in a good economy advocate a bigger one in a bad economy, it leaves me scratching my head.
Because the economy was in a different state. When Bush found the economy with a relatively low unemployment rate and a relatively strong GDP growth that was the time to pay down debt. Instead he choose to pay a large tax cuts and then borrowed a lot of money for his war in Iraq. When Obama found the economy it was in the middle of a financial crisis. Show nested quote +I mean, this graph seems to contradict at least one thing you said just now. Edit: and this is th CBO, not fear mongering Repubs: "The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past." The rest of this warning comes at the bottom of the link. We cannot keep doing what we are doing. Right, but if you read the report it notes that debt will decline until 2018, when it will start again to rise. In other words, today is time to fix the unemployment issues and 2016 should be the election on fixing the structural issues in the economy, including a better way to pay for medicine ok, I eagerly await. You have done much for my perspective. Although I'm still concerned/questioning. I do really like sources though, especially for this type of thing, since it seems more of a mental exercise than a reading of data, considering how complicated everything is.
If youd like there are a couple of general books I can recommend? Thats one of the reasons I cant answer all your questions now with specific cites but I have access to my amazon purchase history...
1.) Why believe the same people who failed to predict the 2008 crisis? (Unless they did, but my understanding is that the large majority of economists missed it). I know the Fed said there wasn't a problem until the problem occurred.
Because most economics did not understand how modern banking has evolved. When Ben Bernanke announced that the subprime mortgage market was 'contained' he did not understand how (a) bonds from sub prime infected supposedly highly safe bonds (b) did not understand how much crap was left on the balance sheets of big banks because of the new banking models (c) many economists, especially the math heavy, neo-classic, republican ones have basically abstracted out money out of their models (d) no one expected bankers to be as suicidal in structuring their own balance sheets (e) most economists stopped trying to explain what happened in Japan from 1989 onward because it was too complicated, and to too many it was more important to continuing building new mathematical structures because thats what was popular/got you tenure
But I do believe that economic historians, if they understood how widespread shadow banking had become by 07, would have predicted the way things played out. And more importantly, certain economists did accurately predict the outcome of the financial crisis.
2.) What is track record for heavy government intervention vs very little government intervention?
Well, we see it in Europe. Grinding recessions in countries who were cut off, with their ultimate end play being a decline of their real wages vs everyone else and exporting their way out of trouble. This will be painful and take a really long time and with the world's 2nd, 3rd and 4th largest economies all pursuing export-focused policies on their own will rely basically on selling more stuff to America
Especially, which one is relevant? That's actually the better question, from what I know about the past and what has been discussed so far. You gave me all these reasons why events in other time periods are not relevant, so where is the history for both the view that turned out to be wrong and the one that turned out to be right? How much of this is guesstimation?
A lot of it is geustimation because financial crises in large economies are quite rare.
Literally we are talking about a 3-4 historical periods: the great depression, Japan's whatever from 89 and Euro Area's response to their own crisis. But we are also relatively well informed on things that dont work, and cutting spending into the face of a crisis definitely does not work. At best you muddle through, at worst you have an ever growing debt load and unemployment.
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On October 06 2013 12:02 Sub40APM wrote:Show nested quote +On October 06 2013 11:15 Lord Tolkien wrote:On October 06 2013 10:16 Nevuk wrote:
This gets more into world politics but if the Austrian School is basically irrelevant why did every European (+US) government randomly become so pro-austerity after 2008? I know there are neo-classical economists arguing for the movement but it's weird to get a grasp on mentally. Was it mostly just the Germans? (I've seen them blamed more than any other country). The 2010 Rogoff paper we were discussing can't have been the entire reason considering the austerity movement was already well-under way before that paper was published.
edit - Also, I miss the old ridiculous presidential convention nomination format where we got stuff like William Jennings Bryan's Cross of Gold speech. Comparatively speaking, countries such as France which had more fiscal discipline prior to the recession were able to maintain expenditure levels or implement counter-cyclical fiscal policies (eg. the Stimulus Package) which were not an option for the "PIGS" (and the only real response they had within the constraints of monetary union was austerity). . That isnt true for Spain.You had stories like this from the FT celebrating Spain all the way into 07 even as the credit markets started to freeze up. http://www.ft.com/intl/cms/s/0/057d3078-c753-11db-8078-000b5df10621.html#axzz2gp0LpbYr"Spain on Wednesday confirmed its position as one of the healthiest economies in Europe by reporting a public sector budget surplus of 1.8 per cent of gross domestic product in 2006, its highest for 30 years." The problem was that Spain was running a massive current account deficit vs Germany, and once Germans stopped recycling their savings into Spanish real estate/bonds that ended. France was comparatively better off because it had a more balanced trade/capital inflows. The better of Northern countries were basically inputs into the German export machine which is why all of them were ok too. But the EU mechanism was broken in a different way anyway, both Germany and France repeatedly violated the stability and growth pact whenever it suited them and the EU simply didnt have the muscle to do anything about it.
True enough; I was painting with a broad brush, as it were.
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On October 06 2013 02:39 oneofthem wrote:
let's be serious. republicans are not intent on fixing entitlements in an intelligent manner. it's a matter of ideology for them.
Republicans do not want to fix entitlement spending. Declare current attempts unworkable and callous, maintain a studied detachment from their unsustainable growth in spending, and do nothing but demonize the efforts (In this very same thread, all the food stamp reform was touted as cuts by the media). Return to the beginning: Republicans aren't serious about fixing entitlements until we deem their efforts as fixes.
The cracks were visible in the 2012 election. + Show Spoiler +. Representatives like Ryan are intent on fixing runaway spending before its growth causes insolvency, benefit cuts, and related. If the programs weren't running bankrupt and projected long-term growths in Debt to GDP, then it would be ideology. The Democrats are more insistent on the preservation of their political power in the near term than the stability of the programs in the long term. For that, they oppose every meaningful effort for reforms. It took the threat of government shutdowns and political defeat to manage the last reform in that area in the 90s.
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On October 06 2013 14:52 Danglars wrote:Show nested quote +On October 06 2013 02:39 oneofthem wrote:
let's be serious. republicans are not intent on fixing entitlements in an intelligent manner. it's a matter of ideology for them. Republicans do not want to fix entitlement spending. Declare current attempts unworkable and callous, maintain a studied detachment from their unsustainable growth in spending, and do nothing but demonize the efforts (In this very same thread, all the food stamp reform was touted as cuts by the media). Return to the beginning: Republicans aren't serious about fixing entitlements until we deem their efforts as fixes. The cracks were visible in the 2012 election. + Show Spoiler +http://www.youtube.com/watch?v=zPxMZ1WdINs . Representatives like Ryan are intent on fixing runaway spending before its growth causes insolvency, benefit cuts, and related. If the programs weren't running bankrupt and projected long-term growths in Debt to GDP, then it would be ideology. The Democrats are more insistent on the preservation of their political power in the near term than the stability of the programs in the long term. For that, they oppose every meaningful effort for reforms. It took the threat of government shutdowns and political defeat to manage the last reform in that area in the 90s.
Even in the 80's both sides pushed it to the brink. It's just the way things go, which is why entitlements are so dangerous.
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EPT
