UK is in triple-dip recession.



That could have been US if Tea Party had its way. For now, they are contained to only couple states, like Florida.

I think you are confounded, so to speak.

Austerity. I think you don't know what this word means.

Really Arkh?

I am rolling my eyes at you.

So another dodge. I see.

Well the facts are, all countries that went with austerity instead of stimulus are now significantly worse off. Ireland, UK. You simply can't cut your way out of recession.

This is very empirical evidence. You can proceed to engage in epistemic closure or you perhaps could examine the facts and adjust your position/methods.

No, just pointing out that your attempted ties here are shallow.

This evidence is about 0.001% of the available evidence.Plus you need to consider how the mess was arrived at in the first place, and that arrival was certainly not ushered in by "austerity".

You can create a bubble of any sort, then if you stop feeding bubble there is obviously going to be some temporary contraction as the bubble deflates. That does not mean you are on the wrong course. It is also preferable to maintaining the bubble growth until it pops and you get real catastrophic contraction.

More dodging.

You can look at Canada as another data point, where they also used deficit spending to avoid worst of the recession.

Sure, excessive deficit spending can cause a number of well-known problems. I am not denying potential for these exists.

What right got wrong is that they looked at these potential problems and decided to go with exactly opposite approach, that approach simply does not work. Theory is nice and all, but it has no empirical backing.

Cite one example in recent history where a country managed to cut spending its way out of a recession.

Not dodging, and rather you should name a modern recession that was not caused by a bubble.

And I would look to the Recession of 1920-21 and quick recovery thereafter for your example.

Quick? QUICK?! That was monetary crisis where pre-FIAT monetary system with lack of liquidity couldn't cope with labor explosion due to returning troops. At no point it was a recession with lost growth, lost jobs and so on.



It went into Roaring 20s, then in turn caused Great Depression. That wasn't quick. Austerity dragged it on and on, probably would have lasted into 50s if not for WW2 and New Deal.

Comparatively speaking yes. WW1 period distortions we largely expelled, and economy did well afterwards. Then The Govt got stupid again, and we all know what happened in the 30's

If you really interested in studying this issue - look into Japan economic policies in 30s.

I have, and it is its own discussion. It was also the result of centralized macroeconomic mistakes, though some posterity pundits have been way off base on their analysis. Also ignoring political and military events.

U.K. cuts growth estimate, will borrow more .



UK will have to borrow more than expected. Wait, borrow more?! How come they have to borrow more after cutting spending?! After all if this was a household, and they paid off credit card and cut spending, how come they now have to borrow more? /sarcasm

This is because household comparisons are garbage, and economies do not operate the same way.

This could have been US if Tea Party and Congress had its way.

Having to borrow more means you did not cut enough. Just like your household.

Um, if you stop feeding the bubble of course you are going to see some relative slowdown until your fundamentals get corrected.

The part that seems to be escaping you, is that this is preferable to pumping the bubbles until they pop.

The mistakes have already been made and a hole has already been dug - choices are 1) temporary slowdown as economy rearranges itself

2) Pump bubble until the whole thing blows up on you aka 1929/2009

So sini...if you were spending more money than you brought home and had to borrow to more wouldn't that be a red flag that maybe you didn't cut enough? how fucking retarded do you have to be to NOT realize you still need to make more cuts? Hell, I would look at how much money you are making to figure out that you need a second job or a better one? How do you not know this? This is as basic math as math can get, a fucking kindergartener could figure this out. You should sue the people that taught you basic math or remedial education, you got fucked pal!


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???


This country has always had a big spending problem, but when nearly 50% of Americans get some sort of Government assistance, and only have the other 50% to reply on, then you will eventually run out of other peoples money. Our current tax system is a bunch of fucking horse shit, it's bad and the only way to truly get any kind of spending,cutting or taxing right we have GOT to get a reformed tax system. That's where it all begins. If they want tax everyone the same, then they should have a flat tax. There's no fucking way in hell that the Government wouldn't get enough money by taxing a flat 10% they would probably gain more in revenue by doing so. No write offs no nothing just a flat tax. The current system is trash... anyone that says otherwise is a fucking retard!

Wolfie. You forgot the keynesian multiplicator.
The one making $1 spent by a state create $2.

Let's just forget about the dollars which have been or will be destroyed when this dollar is taxed. Or about the money routed to shitty investments because they're backed by the state.

Have you considered that a) some portion of bubble is natural and healthy growth b) austerity eliminates that growth as well as bubble c) "fundamentals" might never correct and you can austerity into insolvency?

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?



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.

AGAIN... it all starts with taxes. We need NEW tax reform a new system, not more of the same old bullshit. Stupid is as stupid does with this tax system of ours. We have got to change it, problem is the Government doesn't want to because they can just add 2 or 3 more thousands pages of tax laws every year that barely anyone understands.

We need the K.I.S.S. system... (Keep it simple stupid)

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.

Bill Gross blasts Europe’s focus on austerity

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.

http://www.theatlantic.com/business/arch...mistake/275088/

http://www.theatlantic.com/business/archive/2013/04/who-is-defending-austerity-now/275200/

Its kind of funny actually, how this is being made into a big deal when it never was a deal.

If Europe wanted insight into how to solve their problems, their leaders could have spent $3 on Amazon and gotten a pretty good clue to read on their Kindle/PC. ($40 after VAT)

http://www.amazon.com/Free-Market-Moneta...;keywords=hayek

http://www.latimes.com/business/money/la-fi-mo-economy-wealth-20130423,0,3711482.story

Clearly Obamas plans are working as intended. No, im not being sarcastic in the slightest.

Excel error wasn't a big deal, but insanity of cut-cut-cut austerity is. Former is simply used to highlight the later.

Blaming this on Obama is firmly in "Thanks, Obama!" territory.

Using govt to extract wealth from the general populace in favor of the cronies is something to be thankful for?

Non sequitur

Not quite. Correct me if I am wrong, but you seem to be calling the current situation a good outcome.

Still waiting on your numbers about reduced spendings in european countries.

http://lmgtfy.com/?q=austerity+in+EU

So, how many and which countries diminished their spendings at the state + local levels?

Ok, doing your homework:

http://www.oecd-ilibrary.org/economics....x-oecd-live-02

Which gives something like that:

Spain, Italy, Greece, Portugal, and the UK in 2011. While the others keep on spending more. What an austerity plague!

What this graph suppose to mean? Time vs Spending? If so, any line that changed angle is indicative of austerity of some sorts.

Also what is your point? Are you trying to deny that austerity in EU is happening?!

Really, you don't have to look hard for info, this is on first page searching for austerity UK:

http://en.wikipedia.org/wiki/United_Kingdom_government_austerity_programme

No, look at it again. I think the point Arkh is making, is that just because some people call a turd a rose, its still a turd. Just because some people call Spain program austerity... well, the numbers on total govt expenditure say its still a turd, and not austerity.

Maybe Spain was allocating funds improperly, not actually cutting overall, and using "austerity" as a smokescreen?

Just using Spain as an example, it was the first "Austerity" nation that I looked at.. and low and behold. OECD figures state that Spain has not, in fact, cut spending. So the proponents of "Austerity" moniker must, therefore, be using the label to justify *shifts* in funds, as opposed to cuts in funds.

Leftists are seemingly arguing against *cuts* in funds, so we have a pretty large impudence mismatch in the conversation.

That's government spending per year, you can plot it yourself using the data from the link I got. They offer an export to excel option which make the process easy.

And what I say is what the data shows: what some people call austerity is laughable bullshit. A majority of the EU is spending more now than before and those who have a negative angle have not radicaly cut their spending, just got back to around 2008 levels.
If some vital programs have been cut this mean they have choosen to keep on paying for stupid things. Shitty allocation of means.

Continue twisting the meaning of austerity, maybe in a couple of decades you will be right. Like how you fucked up the meaning of liberal.

You and Arkh can engage in alternative reality thinking all you want, but in this thread titled "Catastrophic consequences of austerity in UK" when we talk about austerity in UK, with supporting evidence, you are not entitled to your own facts.

At page 5, the topic had shifted to austerity. Also, everything said applies to UK as well FYI - I just checked the UK numbers.

So, you are going to have to try again. The facts are plain, and it is a fact that in terms of actual spending the UK was not under any "austerity" program as is commonly understood.

Funds may have been drastically shifted, but overall govt expenditure was NOT drastically cut.

You seriously should have taken the 5 seconds to check the facts, before trying to pull a "but the OP topic was".

http://www.guardian.co.uk/news/datablog/2010/apr/25/uk-public-spending-1963

Do you even read the articles you post or do you just look for pretty graphs that look like they say what you want them to? Plotting spending as a percentage of GDP doesn't tell you anything about actual spending increases or decreases. It only tells you what spending does as a function of GDP. That's your intro to high school algebra lesson for the day.

As you can clearly see from the actual numbers, spending has increased every single year, and more than doubled since 2000.

The only years since 1963 that saw an actual decrease in spending are which are long before this attempt to redefine cuts as a decrease in the rate of spending increase. Absofuckinglutely ridiculous.

Looking at absolute numbers of spending from the last decade, noting that in absolute numbers it increased and concluding austerity does not exist is about as moronic as I expect from a fever swamper crew.

Have you considered that if you were to put 1$ in the bank in 2000, today you'd have more than $1? I'm not going to even attempt to explain you what future value of money, how to adjust it for inflation and growth and so on, but I will point out that 341.5bn in 2000-01 purchased a lot more than 341.5bn today.

As to actual austerity:
2010-11 690bn
2011-12 690bn
2012-13 670bn

Is 3 years of harsh austerity.

So, your contention is that inflation for the past decade has been 200%?

We can talk about future worth and do cost analysis of projects all day long if you're willing to provide real, inflation adjusted numbers. But you didn't want to do that, you wanted to post a graph that seemed to make your point (as long as no one bothered to look at real numbers) and then get your panties in a bunch when someone actually looked at the data you posted.

Stop crying and use reasonable numbers if you want to have a real discussion. If all you're trying to do is provide an opportunity to call everyone but you and idiot, well, then you just show everyone how poorly you understand the dynamics of money (and fundamental concepts of mathematics).

See numbers above.

Example I hope you can understand: If your GDP is $100 in 2010 and $120 in 2015, then your spending in absolute numbers pegged at 30% of GDP would go up from $30 to $36.

You're working off of the premise that government spending should be pegged to GDP. That is an area where we will fundamentally disagree. Government exists to provide certain services independent of the ratio of their cost to GDP.

Congratulations though, on once again ignoring what you don't want to address.

First, wondering where you got those - the OECD was at about 500b

Second , if you think thats harsh austerity even if that figure - especially if that figure is correct - you have a very strange perception.

UK only has ~66mil ppl for crying out loud. At that rate of spending per capita you can run a huge fucking govt apparatus, and indeed the UK has one.

If you want to argue that they are spending money on the *wrong* things, then OK. If you are trying to say they arent spending enough money, you dont have a single leg to stand on.

So couple years later, and we can look at effects of all this austerity. Brexit in UK. Surprisingly, Greece is still in EU but portion of their debt was discharged once they got out of the news. However, Ireland recovered and showing strong growth.

Ironically, Brexit passed at least in part because they said it would leave more money for their universal health plan. Which has been struggling, though remains popular.

The devil is always in the details though: where you get money and what it's spent on. Not just that a lot is spent, or, not spent, for that matter.

I think the finer details tend to get overlooked, especially in public discourse, by the philosophical heirs of Malthus and Mises both.

I don't think finer details at all matter. You shaft people, populism arises. Country ether get shafted as a result and/or get more illiberal to keep masses in check.

It's common to shaft people by both spending, and not spending, as the case may be. I've come to realize that the left-right, more-less dichotomy is mostly false.

We're mostly faced with "Heads I win, Tails you lose" scenarios.