The KGB Oracle Forums General Public Discussion (SPECIAL ACCESS) KGB Political Debate Central Catastrophic consequences of austerity in UK

I am dumbfounded how the government has not scooped you up.
You would fit right in.

Taxes are separate issue.

We are talking here about effects of austerity during recession. Specifically in UK it made recession much worse, I'd argue that this is generalizable to everywhere citing recent examples, while Derid disagrees with me while misusing century-old cases.

Knee-jerk approach of "OMG! Recession! CUT CUT CUT!" only makes recession worse. There is short-term catastrophic consequences where everything goes to shit and there is very dubious and uncertain prospects of it getting better in the long-term.

Correct approach to recession is deficit spending, cutting taxes, and money printing. Think of it as a parachute. You don't want to use it to fly, but if you have to eject from the plane it will save your ass until you get on the ground.

Good time to cut spending and increase taxes is during booming times. When economy is strong and negatives of these steps get offset by overall growth.

Think of economy as fuel mileage (MPG). Difference between 5mpg and 10mpg is huge, while difference between 40mpg and 45mpg is not. The same is with economical growth - 2% to 5% is huge, but 5% to 8% is not so much. Why? Because of overall societal effects - unemployment, wage stagnation and all other social ills happen to a low end, while there very few extra bonuses (for the average guy) at the high end.

If you follow the keynesian logic: you have to spend during crisis.

But something all our governments forgot is the other face of the coin: during good times, you have to cut spending. But this is not a good way to buy votes.

So they did not and put a lot of country in a shitty situation. Best way to resolve this would be to start anew: default on debts AND cut all useless government spending until it gets back to income > spending.

Usually states can cut a lot of shit before going to the essential ones: elevted people salary, a lot of usual "created jobs", inefficient bureaucracy, waging wars, trying to stop some traffics which are harmless. And all the green shit too: that's a luxury for rich countries.

I dont like debt defaulting, it undermines trust. That is a whole other can of worms, and has truly catastrophic consequences.

Better for govt to slowly pull back and let society and the economy slowly adjust to being less dependent on govt. Its like a drug addiction - the habit needs to be kicked, but if going cold turkey might stop the patients heart then best to just wean off.



If it was natural and healthy, it would not need govt artificially pumping it.

So you have not considered it. Instead, you decided to play pretend games of "ideal economy" with your imaginary friends - responsible corporations and rational market players.

Incorrect as per the usual. Besides "responsible" has nothing to do with anything here, and usage of the term just shows you are confusing topics. This infers you do not see the difference between the topics, which in turn strongly implies you lack understanding of the topics as well.

Also if you are implying that central authority can better plan the economy than the private sector you are fighting a battle lost a century ago.

How many Yuro countries have diminished their spending (state + local) and not just "increased slower then previous years" ?

I am specifying state + local because in some of them, for 1 state paid civil servant cut, you got 2 or 3 more paid at the local level.