oldfart
Older than dirt
I've read, attended seminars with, and worked with a number of Harvard economists. Many of them are very good and some of them are pretty bad. Harvard has some quirks that encourage that result in all fields. They tend to pad the faculty by hiring big names after they have done their best work. And they are notorious for high graduation rates regardless of achievement. Harvard is great if you need a sheepskin effect, and you can get a world class graduate education there, but they are "too good" to be held to standards that we might apply to Princeton, Chicago, Michigan, or Wisconsin.You're bashing Harvard economists? HAHVAHD? What's the world coming to.
What about Estonia and the other Baltic States? Did they not severely cut spending instead of significantly raising taxes? Worked out well for them, Estonia is the only EU nation that is in surplus according to this:
If the best austerians can come up with is Estonia, it reveals just how bad the argument is.
Estonia is not doing so well, and their "success" is mostly hype and wishful thinking. But if you want to debate Estonia, make your case.
A lot of the EU countries that are in dire economic straights [straits] didn't really cut spending, they raised taxes instead. And their economies suffered. Spending cuts are no picnic either, those Baltic countries went through a lot of pain for a few years.
Where's the evidence for this assertion?
I'm not saying you gotta go big all at once and balance the budget; I'd be good with a gradual reduction to the point where spending increases do not exceed GDP growth. And I'd be good with higher taxes if and when the economic experiences sustained growth and UE drops because we're creating a lot more jobs rather than because 350,000 people left the workforce.
I think you just contradicted yourself. If the crucial point is that the only way to go is severe spending austerity, and that the failure of austerity to work is because there were tax increases and not enough drastic spending cuts, why would you embrace gradualism?
On a personal note, I think that the timing of tax increases is problematic. Generally it's not a good idea to increase taxes in a depressed economy. On the other side, if it's not done now, political considerations make it impossible to do so later. Reality can impinge on economic theory.
But I also think we and those European countries have to restructure their social contract; deals and promises were made that cannot be kept. And nobody is willing to do that, so the can gets kicked and the problems get bigger and worser. And the really bad part is, future generations will have to deal with the consequences of our prolificacy.
First, the "social contract" is quite different in Europe and the United States. So are the causes of the economic distrubances. Europe's problem is primarily one of trade balances created by the Euro experiment. Changing the "social contract" there is a policy of "internal devaluaton" which has turned out to be largely ineffective and profoundly destabilizing. If you want to debate Europe, the starting point is trade imbalances and capital flows, not national budgets.
In the United States, the problem has been a lack of financial regulation and a financial sector on steroids and out of control. The underlying debt problem is the result of an ideology which insists on tax cuts instead of reducing the debt or paying for things. The "starve the beast" theory is great except for the fact that the "beast" is the American people. I note in passing that having trashed America these "patriots" now are fomenting a succession movement.
So let's have at it. Just don't pretend that A & A is well regarded in the econmics literature.
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