So wolfgang.. if you have a bunch of hicks running economic policy based on feel-good ideology, you have to realize that things will go to shit rather quickly.

You don't try to tell NASA how to fly rockets with driving analogies (e.g. "just floor it until we get to the orbit") why do you think as complex economic problems could be solved with equally moronic (e.g. "just cut more until all is good") suggestions?

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EXAMPLE: You bring in $2000 a month, you spend $4000 a month. You then cut spending by 3% now you are still spending $3800 a month while only bringing home $2000 a month. Even though you made some cuts, you still need to make more cuts to get down to $2000 DUE EWE UNDER STAAND NAO???


Unlike household, money spent by the government directly affect how much it brings in revenues. Even outside direct government spending, austerity contracts monetary supply in a way that doesn't allow non-government to earn and spend money.

In you example - cutting from $4000 to $2000 spending will balance household debt because earnings of $2000 are independent of your spending. Someone else pays you that. They do not depend directly on your spending to pay you the salary.

Better analogy (still shitty, but hey, them thare love em analogies) - $2000 you bring is 80% from cashback you get on your credit card and your interest rate is almost 0% but depends on how much you make. You cut your spending, you kill your cash flow and you get fucked with interest rates.

Last edited by sini; 03/20/13 05:41 PM.
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