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

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)