Austerity is sloppy, and wrong.

Thanks for sharing your perspective. From a non-idiot's perspective, it is not obvious.

 

The day we allowed Jews to marry worked wonders for our economy back then.

 

DIRECT government spending increase (infrastructure), not social security or anything that doesn't directly interject money into the economy.
Cut PERSONAL INCOME taxes for CONSUMERS (poor and middle class). Possibly cut corporate tax for business owners.
The Fed needs to set the target for a low federal funds rate (which they did). Buy securities en masse.

Cut spending + Cut taxes = bad economic policy.
Raise spending + Raise taxes = bad economic policy.

The idea is to allow for the debt to run during recessions and pay that back with increased revenue from inflationary periods.

Also on top of that encouraging the creation of bubbles to put the economy on track is absolutely shortsighted. The banking sector is an extremely volatile and dangerous sector to let run loose. Regardless of whether we get out of the recession or not I hope the banks don't get as lax as they did before with who they decide to hand out loans to.

 

1) Tax the rich on wealth, 2% of every dollar above $2M networth, and 25% of the year over year delta in net worth.

2) Nationalize military research, no contractors.

3) Invest money from taxing the rich on infrastructures

 

Thanks, Northside. Kinda what I figured

Really the thing I was looking at was, SIMPLY, how the economics talk can be mostly about "on-paper" numerical rules and structure. Or maybe thats what I expect or how I see it most the time.

But that there was actually some "humanized" approach suggested. Meaning, in a good way, its actually well-rounded taking the people into account as well. And not just pure number crunching stat-geeking.

Royce White and anti-Morey "assets assessor" people would approve.

 

Why I mentioned gays, my simplistic view, just statistically gays are a small percentage of the population. So just seemed a too small piece of the overall pie of MAJOR economic reform. Thought it MAYBE mixing in a more a social progressive belief (ya know, the stereotypical "liberal" kinda thing)

It was NOT to MARGINALIZE though. And gays do better than average anyway.

But Jews is actually a good example to use. Jews are even WAY LESS a percentage of population. But its goes without saying the major impact they've had in the economy. And obviously fits the suggestion of allowing talent in from everywhere

(So its so sensible, it probably won't be done. And it goes back to proving how it can be "austerity" way to not do effective things.)

 

The countries in Europe that have engaged in austerity measures and managed their budgets well have the strongest economies (at least compared to the European Countries that have not engaged in austerity measures).

Ireland, Germany and England.

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Margaret Thatcher is looking like a genius right now. She pretty much saved England from financial ruin.

Excessive Spending leads to inflation. (Spain, South Africa and Argentina come to mind).
To much regulation leads to a stagnation of business growth (IE, France, Spain and Greece)
Excessive Spending and too much regulation leads to high underemployment (France, Spain, Argentina, South Africa)

You can't spend your way out of a recession if don't have enough of a tax base (private business activity), or you will choke yourself to death.

Paul Krugman (Obama's favorite economist) is a New York times columnist that is also a brilliant Nobel Prize winning economist who has constantly railed against austerity in his New York times articles. It should be noted that he has repeatedly said that his political beliefs trump his economic beliefs. As a result, many of his articles only contain half truths to bolster his arguments against austerity.

A closer examination of his articles and the arguments of those economists that are opposed to austerity will find their arguments littered with incorrect analysis. One example of this is how unemployment rates are measured in different countries. For example, in the US, we only count people that are looking for jobs and stop counting people that have stopped looking for jobs because they can not find employment. That is not how Ireland measures Unemployment, thus the unemployment rate that is reported in Ireland higher than that of the US. In reality, if we used the same metrics to measure unemployment in both countries, Ireland has a lower unemployment rate as compared to the US and most European countries.

If you get rid of massive spending and embrace austerity, you have to get rid or curtail allot of social welfare programs. It would be the end of socialists and the liberals would also take a massive hit and reinforce the argument that you can not end poverty by spending massive amounts of money.

The only way to avoid austerity would be to develop a culture where people have strong work ethics. (I.E., Germany, Japan & Switzerland come to mind.) Thus the total output of the countries is large enough to pay for the social programs in those countries. Further the expense these countries incur for social programs is also minimized on a per-capita bases because you have a larger percentage of the workforce working and fewer people using social welfare programs, and even when they do, they use fewer social welfare programs.

 

Ok I have to give credit where credit is due. This is a good post, Northside. Succinct and to the point, which is only possible when one takes the time to condense their thoughts into their main points. Ben Franklin once said "I would have written you a shorter letter had I had enough time...".

It's clear you're a hard core Keynesian, rather than of the Austrian mind. At least I can understand your position now. You're probably very frustrated that the US is employing a hybrid Keynesian/Austrian approach by full blown monetary stimulus with a touch of austerity (very small). I get your frustration now.

I believe there are a few "no regrets" moves, a couple of which you have listed already. First off, I like the immigration idea you had, but I would nuance it more. I love bringing in smart, educated immigrants who create jobs. Create incentives for them to do that. Education is another good idea, although you didn't expand on it much. One of the best things the US has going for it is its Universities. Taken as a group, they are without peer in the world, and are responsible for bringing some of the absolute best and brightest to this country. It would help to boost the lower levels, which are lagging. I'd like to see healthcare fixed in a more efficient manner, as well. The current turd isn't a step forward.

 

These countries are huge welfare states.

Let me quote Wikipedia:

 

What reality do you live in? Austerity pushed England back into recession (and may have just pushed it into a third..., the ol' triple dip recession, and Ireland has had 4 years of total contraction and stagnation and is now muddling along with 14% unemployment - five years later.

Germany meanwhile hasn't really applied an austerity program at all.

So basically, you are spectactularly wrong on all three fronts

 

Hurray for Krugman So sad for the Austrians, the libertarians and the typical WSJ economics followers.

So much for GOP economics and their leader Paul Ryan.

Will empirical data actually make them think. I doubt it.

 

I feel like you're baiting me. But whatever I'll take it. I always like to educate my fellow man.

You are wrong (shock!) on the Austrian position on austerity.

And another if you're interested*: http://mises.org/daily/6289/The-Myth-of-Austerity

*At this point, I know you're not interested in actually learning about the positions held by those who disagree with you. You would rather confuse and conflate and sloppily attack a straw man.

 

Is triple dip recession now a sign of a strong economy?