How is austerity doing in Europe

[Rshermr]

So, there has been a lot of talks about the austerity programs being pushed on european countries. Lots of blame being placed on the countries where austerity is in place, from all sorts of folks. Austerity is, in general, a forced program of free market policies with the primary plan being the reduction of debt by elimination of government spending. The stated projected outcome is that debt will be reduced, GDP will grow, and employment will be increased.
I have been waiting to determine what the outcome is likely to be. My want is that it would be most likely that Austerity would be a disaster. But I felt I owed it a look before mouthing off about the absurdity of the whole thing. And in my opinion, my opinion is of little value until there is some proof of the likely outcome. So, I kept watching, and after a year or two, I think the verdict is close to in. Increasingly. impartial sources close to the subject have become more and more and more pessimistic. And we are close to a time when it will be the decesion of most, by a wide margin, that austerity has failed, or is failing, in pretty much every country where it has been instituted.
Here is an article out of the UK that is very representative of what is being said:

Democracy in Europe has not been suspended, and the collision course is more apparent than ever. "Stop the world, we want to get off!" was The Wall Street Journal's verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.

No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country's debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there's the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people.
Owen Jones: This austerity backlash across Europe could transform Britain - Commentators - Voices - The Independent

We should be interested. Austerity has some major similarities to our own fiscal cliff issues. We should be interested. European austerity is the model for neo conservative policies. Looking at how things are going, from a realistic point of view, should be useful.

 

[TheOldSchool]

I take some issue with the idea of European austerity being an example for what could happen here. Greece, for example, is being dictated to by other countries. The U.S. would never stand for that.

Austerity may work in Europe. Because so many sovereign nations agreed to a relationship that takes away their sovereignty, and because of that relationship it is harder for each country to clean out its closet. Austerity may correct that.

America will be fine. There is no way to legitimately compare us to the mess that's going on in Europe.

 

[Esmeralda]

I take some issue with the idea of European austerity being an example for what could happen here. Greece, for example, is being dictated to by other countries. The U.S. would never stand for that.

Austerity may work in Europe. Because so many sovereign nations agreed to a relationship that takes away their sovereignty, and because of that relationship it is harder for each country to clean out its closet. Austerity may correct that.

America will be fine. There is no way to legitimately compare us to the mess that's going on in Europe.

Greece is being asked to follow guidelines set by the EU. If Greece does not want to be part of the EU, they can resign and go their own way, but as long as they want to be part of the EU, they have to follow the guidelines. As well, the EU has financially bailed Greece out of a major disaster, and part of the agreement between Greece and the EU to get that money was that they follow the guidelines set by the EU. Essentially, if they want to give the money back and resign from the EU, they are free to do so.

 

[Esmeralda]

So, there has been a lot of talks about the austerity programs being pushed on european countries. Lots of blame being placed on the countries where austerity is in place, from all sorts of folks. Austerity is, in general, a forced program of free market policies with the primary plan being the reduction of debt by elimination of government spending. The stated projected outcome is that debt will be reduced, GDP will grow, and employment will be increased.
I have been waiting to determine what the outcome is likely to be. My want is that it would be most likely that Austerity would be a disaster. But I felt I owed it a look before mouthing off about the absurdity of the whole thing. And in my opinion, my opinion is of little value until there is some proof of the likely outcome. So, I kept watching, and after a year or two, I think the verdict is close to in. Increasingly. impartial sources close to the subject have become more and more and more pessimistic. And we are close to a time when it will be the decesion of most, by a wide margin, that austerity has failed, or is failing, in pretty much every country where it has been instituted.
Here is an article out of the UK that is very representative of what is being said:

Democracy in Europe has not been suspended, and the collision course is more apparent than ever. "Stop the world, we want to get off!" was The Wall Street Journal's verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.

No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country's debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there's the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people.
Owen Jones: This austerity backlash across Europe could transform Britain - Commentators - Voices - The Independent

We should be interested. Austerity has some major similarities to our own fiscal cliff issues. We should be interested. European austerity is the model for neo conservative policies. Looking at how things are going, from a realistic point of view, should be useful.

I traveled around Europe quite a bit before the EU even existed. Greece was one of the poorest and most poorly managed countries. Whatever they are facing now, it is not any worse than what it was like before the EU. The EU brought them a great deal of prosperity, which they squandered. The EU is not the culprit here.

 

[Norman]

There is no austerity in europe. Each year the public debt is higher than last year, nominally and relative to GDP.

However, everything seems like austerity if you compare to USA.

 

[editec]

Austerity isn't measured by the public debt.

Austerity is measured by the quality of lives of the people.

 

[Esmeralda]

Austerity isn't measured by the public debt.

Austerity is measured by the quality of lives of the people.

Well, up until 1.5 years ago, I was living in Europe for 4 years, and my quality of life was very nice. As well, I was working, and the people I worked with were not complaining about the quality of their lives either. I paid a 40% tax but still took home a decent salary and lived a nice lifestyle.

 

[usmcstinger]

So, there has been a lot of talks about the austerity programs being pushed on european countries. Lots of blame being placed on the countries where austerity is in place, from all sorts of folks. Austerity is, in general, a forced program of free market policies with the primary plan being the reduction of debt by elimination of government spending. The stated projected outcome is that debt will be reduced, GDP will grow, and employment will be increased.
I have been waiting to determine what the outcome is likely to be. My want is that it would be most likely that Austerity would be a disaster. But I felt I owed it a look before mouthing off about the absurdity of the whole thing. And in my opinion, my opinion is of little value until there is some proof of the likely outcome. So, I kept watching, and after a year or two, I think the verdict is close to in. Increasingly. impartial sources close to the subject have become more and more and more pessimistic. And we are close to a time when it will be the decesion of most, by a wide margin, that austerity has failed, or is failing, in pretty much every country where it has been instituted.
Here is an article out of the UK that is very representative of what is being said:

Democracy in Europe has not been suspended, and the collision course is more apparent than ever. "Stop the world, we want to get off!" was The Wall Street Journal's verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.

No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country's debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there's the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people.
Owen Jones: This austerity backlash across Europe could transform Britain - Commentators - Voices - The Independent

We should be interested. Austerity has some major similarities to our own fiscal cliff issues. We should be interested. European austerity is the model for neo conservative policies. Looking at how things are going, from a realistic point of view, should be useful.

Do you know what got them into their Economic Crisis in the first place?

It certainly was not austerity!
Greece News - Breaking World Greece News - The New York Times

French president François Hollande has bowed to massive pressure for business tax cuts to pull France’s economy out of slump and stave off industrial decline, ditching a core element of his socialist platform.

Francois-Hollande-lurches-Right-in-historic-U-Turn-to-save-French-economy.html
Critics call it the most humiliating U-turn in French politics since François Mitterrand abandoned his disastrous experiment of "Socialism in one country" under a D-Mark currency peg in 1983.

All of Europe made three big mistakes causing their Economic Crisis.

Our President is taking us forward to an even greater Economic Crisis.

The Democrats have no idea that the President continues to pursue an economic policy that has never worked. Europe is a perfect example of how this Economic Theory fails.

Do you even know what the name of this failed Economic Theory is?

You are living proof of just how bad our Public Education System has become.

 

[Esmeralda]

So, there has been a lot of talks about the austerity programs being pushed on european countries. Lots of blame being placed on the countries where austerity is in place, from all sorts of folks. Austerity is, in general, a forced program of free market policies with the primary plan being the reduction of debt by elimination of government spending. The stated projected outcome is that debt will be reduced, GDP will grow, and employment will be increased.
I have been waiting to determine what the outcome is likely to be. My want is that it would be most likely that Austerity would be a disaster. But I felt I owed it a look before mouthing off about the absurdity of the whole thing. And in my opinion, my opinion is of little value until there is some proof of the likely outcome. So, I kept watching, and after a year or two, I think the verdict is close to in. Increasingly. impartial sources close to the subject have become more and more and more pessimistic. And we are close to a time when it will be the decesion of most, by a wide margin, that austerity has failed, or is failing, in pretty much every country where it has been instituted.
Here is an article out of the UK that is very representative of what is being said:

Democracy in Europe has not been suspended, and the collision course is more apparent than ever. "Stop the world, we want to get off!" was The Wall Street Journal's verdict on the mounting European anti-austerity backlash. The truth is that the real world has paid the high priests of austerity an unwelcome visit. Their policies have sucked growth out of the economy, failed to tackle debt, dramatically increased unemployment, and devastated living standards. It would be utterly baffling if people did not fight back.

No wonder Greece is at the forefront of the backlash. A modern European society is being dismembered by austerity. The economy has shrunk by nearly a fifth, and the country's debt continues to mount. Over half of young people are without work; the minimum wage has been slashed to desperately low levels; and wages have fallen by a third since 2009. Then there's the ultimate indicator of despair: the number of people taking their own lives. Greece had one of the lowest suicide rates in the world, but experts suggest it may have doubled since the crisis began. Austerity is literally killing people.
Owen Jones: This austerity backlash across Europe could transform Britain - Commentators - Voices - The Independent

We should be interested. Austerity has some major similarities to our own fiscal cliff issues. We should be interested. European austerity is the model for neo conservative policies. Looking at how things are going, from a realistic point of view, should be useful.

Do you know what got them into their Economic Crisis in the first place?

It certainly was not austerity!
Greece News - Breaking World Greece News - The New York Times

French president François Hollande has bowed to massive pressure for business tax cuts to pull France’s economy out of slump and stave off industrial decline, ditching a core element of his socialist platform.

Francois-Hollande-lurches-Right-in-historic-U-Turn-to-save-French-economy.html
Critics call it the most humiliating U-turn in French politics since François Mitterrand abandoned his disastrous experiment of "Socialism in one country" under a D-Mark currency peg in 1983.

All of Europe made three big mistakes causing their Economic Crisis.

Our President is taking us forward to an even greater Economic Crisis.

The Democrats have no idea that the President continues to pursue an economic policy that has never worked. Europe is a perfect example of how this Economic Theory fails.

Do you even know what the name of this failed Economic Theory is?

You are living proof of just how bad our Public Education System has become.

The main reason for economic problems in Europe is the world wide recession, not EU economic policies.

 

[Oldstyle]

Austerity isn't measured by the public debt.

Austerity is measured by the quality of lives of the people.

Wow...now THAT is some serious fertilizer grade bullshit you're shoveling there, Ed! "Austerity is measured by the quality of lives of the people." It sounds so "correct" that it must be right...right? Only austerity, as it is being called, is nothing more than living within one's means instead of spending money one doesn't have. Does having to live within your means lower the quality of people's lives? I suppose if you don't get to retire at 50 with full benefits and take two months off every year for paid vacation that your "life" might not be as wonderful as it was before. Telling your kid that they can't have that candy bar they just picked up at the checkout counter probably lowers the "quality of life" for the poor little tyke but that doesn't mean saying NO every once in a while isn't the right thing to do.

The Left is so busy trying to make the point that "austerity" isn't fun that they fail to stop and realize that it isn't SUPPOSED to be fun. You're tightening your belt and going without things that you had before. That's never a pleasant experience. Getting free stuff is always cool but that old adage about there being no such thing as a "free lunch" applies to the whole austerity discussion. Living on a budget isn't as enjoyable as running up huge debts on your credit card. But sensible people know they can't do the latter.

 

[Oldstyle]

And I love the fact that the board's resident Tommy Flanagan is back trying to post intelligently about economics! You gotta admire the little guy's chutzpa. It takes nerve to pretend to be an authority on a subject you know nothing about.

He took a little leave of absence after declaring that he was an executive at BP while folks were discussing energy policy. I think even Rshermr knew he was a little "over the top" on that lie.

 

[EdwardBaiamonte]

The main reason for economic problems in Europe is the world wide recession, not EU economic policies.

The world wide recession is caused by world wide liberal economic policies of which Europe is among the foremost exemplars. Did you think the Girl Scouts caused the recession?

 

[ekrem]

Greece is being asked to follow guidelines set by the EU. If Greece does not want to be part of the EU, they can resign and go their own way, but as long as they want to be part of the EU, they have to follow the guidelines. As well, the EU has financially bailed Greece out of a major disaster, and part of the agreement between Greece and the EU to get that money was that they follow the guidelines set by the EU. Essentially, if they want to give the money back and resign from the EU, they are free to do so.

Greece has secured 320 billion $ (240 billion €) of bail-out money from what is called the TROIKA. Its total public debt together with the bail-out is around 450 billion $. Much of the bail-out money is used to service existing debt.

If the Greeks think they've the option to disagree with the TROIKA then Greece will collapse and there will be anarchy.
There's not much hope for Greece's future, at least it still can be a peaceful future if the current and future Greek governments play by the rule of the TROIKA.

 

[EdwardBaiamonte]

If the Greeks think they've the option to disagree with the TROIKA then Greece will collapse and there will be anarchy.

maybe not anarchy just a return to the printing press and maybe an opportunity to renounce much of the debt and start over.

There's not much hope for Greece's future,

not so fast, maybe they will learn a big lesson and learn to live within there means.

 

[ekrem]

Greece falsified their national accounts (reporting to Eurostat) before they entered the €-zone so that it appears they meet the requirements for the adoption of the €.
After the adoption of the € the Greeks placed bonds (and other forms of state financing) on the open-market more comparable to Germany's interest-rates.
This is criminal energy. Pity for the Greek situation is therefor limited.
If the TROIKA wouldn't have "saved" Greece a lot of institutions and people around the globe would have lost money.
With the bail-out deals Greece public debt is now mostly owned by States or multi-national institutions.

Blue line shows Greece's interest-rates for 10-year bonds before and after adoption of €.

 

[Rshermr]

So, usmcstinger says:

Our President is taking us forward to an even greater Economic Crisis.

The Democrats have no idea that the President continues to pursue an economic policy that has never worked. Europe is a perfect example of how this Economic Theory fails.

Do you even know what the name of this failed Economic Theory is?

You are living proof of just how bad our Public Education System has become.

That would be your opinion. And I have no reason to be interested in your opinion.
So, you are saying that you are a true believer in tax cuts and spending cuts to get us out of our problems. Which, most believe, is primarily an unemployment problem. Do you have an example of when, with the economy in a state of high unemployment, the US has ever been helped by tax and spending cuts?
Recently, we saw the unemployment and revenue problems of this country HELPED by increased taxes that funded stimulus spending during the clinton admin. And Reagan used increased spending and massive borrowing to fund stimulative spending after the UE rate hit 10.8% in 1982.

 

[Rshermr]

So, oldstyle is at it again. He says:
And I love the fact that the board's resident Tommy Flanagan is back trying to post intelligently about economics! You gotta admire the little guy's chutzpa. It takes nerve to pretend to be an authority on a subject you know nothing about.

that would be your opinion. I have a reasonably good understanding of economics, based on an econ degree and a whole lot of study. But, it is amusing to hear a dish washer telling me I do not understand the subject.

Then, Oldstyle said:

He took a little leave of absence after declaring that he was an executive at BP while folks were discussing energy policy. I think even Rshermr knew he was a little "over the top" on that lie.

And that would be a bald faced lie. Which is nothing new for oldstyle. I never in my life said I was an executive at BP. I never worked for them. I did work with execs at BP, in a position with a vendor selling to them. But I never in my life worked for them. Now, maybe if you disagree, you would like to provide some proof. But of course, you can not, because you are lying. Again. As you are wont to do.
Relative to a leave of absence, that would be none of your business. I am retired, and often get away from posting here. Sorry you have a problem with that.

 

[Rshermr]

Greece falsified their national accounts (reporting to Eurostat) before they entered the €-zone so that it appears they meet the requirements for the adoption of the €.
After the adoption of the € the Greeks placed bonds (and other forms of state financing) on the open-market more comparable to Germany's interest-rates.
This is criminal energy. Pity for the Greek situation is therefor limited.
If the TROIKA wouldn't have "saved" Greece a lot of institutions and people around the globe would have lost money.
With the bail-out deals Greece public debt is now mostly owned by States or multi-national institutions.

Blue line shows Greece's interest-rates for 10-year bonds before and after adoption of €.

Any proof of what you are saying. As in a link?

 

[Rshermr]

So, we can all agree that Greece brought on much of it's own problems. Though the recession in greece was a world wide problem. But, Greece is a special case. But I did not ever suggest the problems in Greece, or anywhere else were CAUSED by Austerity. I simply suggested that Austerity, by the words of most impartial sources is not working to CORRECT the problem.

Take a look at a more important country, relative to the health of Europe.

Forget, for a moment, the Greek tragedy. The tale of social woe set to play out in Spain this year is both bigger and more important to the world. For the drama of rescuing the euro, or letting it sink, will be played out on Spanish soil.

That is not to say Spaniards will have it worse than Greeks, though Eurostat figures show only Bulgaria and Romania now have a higher percentage of people deemed at risk of poverty. Spain's economy will shrink, once more, by 1.5% – a dramatic enough figure, though one most Greeks would happily settle for. But Spain represents a quantitative leap in Europe's ongoing tale of misery. Its economy is five times bigger than Greece's – accounting for 12% of the eurozone. And there are almost twice as many Spaniards as there are people in bailed-out Portugal, Ireland and Greece together.

Already the country's social fabric is tearing. Family networks keep the working class going as unemployment hits 26%. Fewer than half of those aged under 25 find work. Anecdotes of misery abound. Grandmothers with memories of the "hungry" 1950s cook up large pots of lentils to feed unemployed grandchildren. At night, small crowds gather outside supermarkets in poorer neighbourhoods of Madrid, seeking thrown-out produce. In middle-class neighbourhoods ghostly figures wander the streets rummaging through bins by night.

Spaniards are more likely to fret about jobs, incomes and the shrinking value of what they own. Last year, some 800,000 people lost their jobs. In 2013, unemployment will rise further as another half a million or more jobs are lost. A new labour law offers workers in companies with falling revenues either wage cuts, sackings or both. And house prices will continue to tumble in a country where 80% own their homes. Prices dropped 15% last year – the biggest fall since a housing bubble burst in 2008. The stock of houses up for sale is growing thanks to foreclosures. A rash of suicides among those about to lose their homes saw new legislation introduced to protect the most vulnerable at the end of last year.
http://www.guardian.co.uk/world/2013/jan/01/spain-pain-austerity-deepens

So, does it look like Austerity is working there??

 

[Esmeralda]

The main reason for economic problems in Europe is the world wide recession, not EU economic policies.

The world wide recession is caused by world wide liberal economic policies of which Europe is among the foremost exemplars. Did you think the Girl Scouts caused the recession?

LOL No it wasn't. It was caused by loose and lawless activities by the banking industry and stock markets. The world wide recession has nothing to do with social welfare policies in various countries. If any one country is responsible for the worldwide recession, it is America.