Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 29 Oct 2011 08:30 PM |
| http://www.thedailybeast.com/newsweek/2011/05/29/austerity-works.html |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 29 Oct 2011 08:53 PM |
The point is that Greece & Co. are unable to pay off their debts, not simply "excessive borrowing." ___ And they have all that debt because of excessive borrowing. It's not a difficult connection to make.
The UK is still borrowing, and it is still spending; the austerity cuts have also made a massive impact on the economy. Consumer spending is still low, unemployment is still high, and the people are disillusioned by the a of government support. ___ Maybe you ought to re read the article.
"Members of the Deficits Forever club are intellectually lazy when they assert that the U.K. economy is growing slowly because austerity doesn’t work, implying that things would be better had the spending binge continued. Maybe. But maybe not. A responsible politician wouldn’t take the gamble because the costs of being wrong are too high. Just ask the Greeks." |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 29 Oct 2011 09:26 PM |
Read what else I posted. It's a massive oversimplification ___ I did. I agree with some of it.
I have read it. It assumes that there are no negative affects of austerity, which is empirically false. ___ It doesn't say that at all. |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 29 Oct 2011 09:30 PM |
| "Members of the Deficits Forever club are intellectually lazy when they assert that the U.K. economy is growing slowly because austerity doesn’t work, implying that things would be better had the spending binge continued. MAYBE. But maybe not. A responsible politician wouldn’t take the gamble because the costs of being wrong are too high. Just ask the Greeks." |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 30 Oct 2011 08:31 AM |
>Members of the Deficits Forever club are intellectually lazy when they assert that the U.K. economy is growing slowly because austerity doesn’t work, implying that things would be better had the spending binge continued
Things are better in the US where we DID spend. ____ You are ignoring the ONE WORD after that sentence that matters: "MAYBE"
He is saying, well, yeah, spending probably does stimulate the economy. But it's still a gamble to continue running a larger and larger deficit, because what happened to Greece could happen to you: the creditors could start dumping your debt. That will hurt your economy 10X more than spending will ever help it. |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 30 Oct 2011 08:48 AM |
No, no no, Greece continued spending outrageously into the recession, and the markets realized Greece had no way of paying for it. So they dumped the Greek debt and then Greece couldn't even meet their interest payments. They had to resort to austerity. But if Greece had went the way of the United Kingdom, and cut their budget before things went down, the cost of borrowing would have fallen like did it did for the UK, and the austerity would not have needed to be as severe as it was.
As you can see here, Greece had no austerity in 2009: http://media.ft.com/cms/505a359c-d045-11df-afe1-00144feabdc0.gif
Argentina is not comparable. First off, Greece has the Euro. A Greek default would have disastrous consequences for the European and international economy. Second, according to the article I assume you're getting this from, "the debilitating effects of Argentina’s 2001 default and currency devaluation still linger, and "If anything, economists say, Greece’s prospects could prove worse." |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 30 Oct 2011 10:35 AM |
Again, this is a gross oversimplification. Idiotic regulations, an idiotic tax code, and a social safety net that the Greeks could not pay for (partly because of the first two problems listed) was what drove their debt as high as it was. They simply weren't making enough in revenue for bondholders to be confident. ___ Austerity is not confined to cutting spending- it includes any methods that would effectively reduce the deficit, which includes tax and regulation reform. Furthrmore, he clearly mention the tax component! I honestly have to wonder if we are reading the same article.
The EU took the worst path possible. The Greeks needed reform, but austerity has just made the problem worse. Ferguson overlooks these problems, and instead focuses on the effects of what would have happened if the Greeks continued spending without making any changes to the taxcode. He has set up an either-or paradigm, where no one is actually taking the other side. ___ He does not overlook these problems at all, I keep telling you this! He clearly says, yes, it does cause many problems. But if it had not been done, it would have been 10X worse! This is undeniably true. Greece cannot default.
Austerity has not made the problem worse. Greece's deficit has been cut significantly. It's the first step to stabilization. |
|
|
| Report Abuse |
|
|
| |
|
Warrab
|
  |
| Joined: 17 Oct 2010 |
| Total Posts: 2390 |
|
|
| 30 Oct 2011 10:51 AM |
Uh... http://www.cnbc.com/id/44870491/Greek_Deficit_Widens_15_January_September ___ Sorry- that was what the chart said. Regardless, this can hardly be attributed to austerity. The United States also suffered rather anemic economic growth in this time period.
Of course not. But in the realm of EU politics, that is what austerity is defined as, and that is what austerity has amounted to. We can play definitional games if you like, but that only further divorces both of our sides from reality. I agreed with Niall Ferguson on the tax code issue, and I thought one of my replies showed that. ___ You specifically said Ferguson ignored the issue of taxes and focused on spending: "Ferguson overlooks these problems, and instead focuses on the effects of what would have happened if the Greeks continued spending without making any changes to the taxcode."
Anyway, Greece has already raised taxes on people and businesses. http://news.bbc.co.uk/2/hi/8546589.stm
No one said Greece should have kept spending without reforming the tax code. Again, Ferguson has set up a false dichotomy. ___ Reforming the tax code is not going to fill the budget deficit. Spending had to be cut. |
|
|
| Report Abuse |
|
|