How is austerity doing in Europe

[Procrustes Stretched]

European austerity is the model for neo conservative policies.

Why is something always a model to follow? Reminds me of the health insurance debate. Mention you want change and it becomes a battle over using an European model.

What ever happened to the good old fashioned American ingenuity of borrowing and stealing and reworking to fit American society?

and the USA economy is in no condition exactly similar to the shit that hit in Europe or in Europe as a whole.

We are not Europe and it is conservatives who want America to be more like Europe. Saying the USA is becoming like Europe and we need an European fix. Bullshit!

 

[EdwardBaiamonte]

Ed how many times do we have to go over this: a sovereign government, which issues its own currency, cannot go bankrupt.

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

 

[Quantum Windbag]

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.

Tax hikes are bad for the economy, who'd a thunk it?

 

[boedicca]

Ed how many times do we have to go over this: a sovereign government, which issues its own currency, cannot go bankrupt.

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

Zimbabwe may not be technically bankrupt, but if we follow their example, we'll all be paying for our bread with $1,000,000 bills.

 

[EdwardBaiamonte]

We are not Europe and it is conservatives who want America to be more like Europe. Saying the USA is becoming like Europe and we need an European fix. Bullshit!

Europe is obviously being smarter than we are in the sense that they seem to be under more pressure to learn to live within their means and therefore to avoid bankruptcy.

We are smarter in the sense that we have enjoyed a much higher standard of living thanks to more freedom from a cripppling nanny liberal state.

 

[EdwardBaiamonte]

Ed how many times do we have to go over this: a sovereign government, which issues its own currency, cannot go bankrupt.

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

Zimbabwe may not be technically bankrupt, but if we follow their example, we'll all be paying for our bread with $1,000,000 bills.

and paying for our restaurant meals before we eat them to make sure we have enough to pay for them after their cost has inflated while we eat them. True story!! But to a brain dead liberal this is not bankruptcy!!

 

[Kimura]

Taxes aren't about obtaining money for expenditures, they're about regulating spending power (aggregate demand) so we don't cause inflation.

of course this is too stupid!! Inflation is caused by an increase in the money supply, not by taxes. This is Econ 101. Welcome to your first lesson.

Ed, stop being a twat, you've clearly never even taken anything resembling an economics course in your life. You repeat idiotic talk radio sound bytes like a moron. All you do is continually insult people while barely being able to string together coherent sentences. I've actually worked in finance, been published, presented at conferences, and done research at the undergraduate and graduate level. I'm not saying I'm anything special, but at least I have a general understanding about macroeconomics, labor theory, microeconomics and monetary theory.

For the tenth time, an increase in the money supply doesn't directly cause inflation. Even Ludwig von Mises, an Austrian economist, stated this very fact, even though I demonstrated the flaws inherent in the Quantity Theory of Money, which Friedman even acknowledged later in his life.

 

[Kimura]

Ed how many times do we have to go over this: a sovereign government, which issues its own currency, cannot go bankrupt.

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

Zimbabwe may not be technically bankrupt, but if we follow their example, we'll all be paying for our bread with $1,000,000 bills.

Zimbabwe had eighty percent of its industrial capacity wiped out from civil war, and it had its debts denominated in US dollars, which is what caused the hyperinflation. As they printed money, it wasn't being off-out by an increase in real goods and services, which is what caused hyperinflation. All US debts are denominated in US dollars, so the US will always be able to pay its debts.

 

[Kimura]

Ed how many times do we have to go over this: a sovereign government, which issues its own currency, cannot go bankrupt.

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

Ed, I'm done repeating myself. I can only explain it in so many ways what causes inflation and how we define inflation in economics and finance. You have no clue what you're talking about, I just can't repeat myself twenty times in a thread.

 

[Kimura]

What caused hyperinflation in the Weimar Republic was the printing of huge amounts of paper marks in order to buy other foreign currencies to pay their Treaty of Versailles debts because their creditors were no longer willing to take paper marks. In effect they caused their own paper currency to be worth less and less which is what the Fed is doing every time that it prints more paper dollars to buy more US government debt.

What I find amusing is that a quick look at the long list of countries that have been beset by hyperinflation would make it seem rather obvious that sovereign nations really AREN'T that different than households when it comes to their finances. The fiddler at some point has to be paid. Having the ability to print your own currency may very well put off that date...but at some point that bill is going to come due.

Weimar had it debts denominated in Sterling and had its industrial capacity destroyed by war. Its industrial capacity was worthless since other countries effectively controlled its output. The more Weimar printed money, it wasn't being off-put by a supply of real goods and services, thus causing hyperinflation. This cannot happen in the United States, since we don't have our debts denominated in a foreign currency, nor has our industrial capacity been obliterated by civil war or war. We also have a stable political system at the end of the day. The US will ALWAYS be able to pay its debts without a problem whatsoever.

 

[Dont Taz Me Bro]

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.

The European Socialist welfare state is just as much responsible for their mess as the world wide recession. If nations like Greece hadn't been indebting themselves in order to prop up a decadent welfare state they couldn't afford they would have been able to weather the storm better like Canada and Germany have, for instance. They have been far more responsible in paying for their entitlements and the world wide recession has had little impact on the Canadians.

 

[Dont Taz Me Bro]

The US will ALWAYS be able to pay its debts without a problem whatsoever.

The patently, unequivocally FALSE. It will catch up to us. It's just a matter of when, not if.

 

[boedicca]

Taxes aren't about obtaining money for expenditures, they're about regulating spending power (aggregate demand) so we don't cause inflation.

of course this is too stupid!! Inflation is caused by an increase in the money supply, not by taxes. This is Econ 101. Welcome to your first lesson.

Ed, stop being a twat, you've clearly never even taken anything resembling an economics course in your life. You repeat idiotic talk radio sound bytes like a moron. All you do is continually insult people while barely being able to string together coherent sentences. I've actually worked in finance, been published, presented at conferences, and done research at the undergraduate and graduate level. I'm not saying I'm anything special, but at least I have a general understanding about macroeconomics, labor theory, microeconomics and monetary theory.

For the tenth time, an increase in the money supply doesn't directly cause inflation. Even Ludwig von Mises, an Austrian economist, stated this very fact, even though I demonstrated the flaws inherent in the Quantity Theory of Money, which Friedman even acknowledged later in his life.

How'd that work out for Weimar Germany?

 

[Kimura]

The US will ALWAYS be able to pay its debts without a problem whatsoever.

The patently, unequivocally FALSE. It will catch up to us. It's just a matter of when, not if.

Are you saying the US is somehow running out of dollars? The US government is only inflation constrained, not revenue constrained.

 

[Kimura]

of course this is too stupid!! Inflation is caused by an increase in the money supply, not by taxes. This is Econ 101. Welcome to your first lesson.

Ed, stop being a twat, you've clearly never even taken anything resembling an economics course in your life. You repeat idiotic talk radio sound bytes like a moron. All you do is continually insult people while barely being able to string together coherent sentences. I've actually worked in finance, been published, presented at conferences, and done research at the undergraduate and graduate level. I'm not saying I'm anything special, but at least I have a general understanding about macroeconomics, labor theory, microeconomics and monetary theory.

For the tenth time, an increase in the money supply doesn't directly cause inflation. Even Ludwig von Mises, an Austrian economist, stated this very fact, even though I demonstrated the flaws inherent in the Quantity Theory of Money, which Friedman even acknowledged later in his life.

How'd that work out for Weimar Germany?

Not well, but comparing Weimar to the US isn't a valid comparison, since Weimar had it debts denominated in Sterling and had its industrial capacity destroyed by war. This rendered it industrial capacity useless because other nations controlled its output. The more Weimar printed money, it wasn't being off-put by a supply of real goods and services, which resulted in hyperinflation among other things.

 

[Oldstyle]

European austerity is the model for neo conservative policies.

Why is something always a model to follow? Reminds me of the health insurance debate. Mention you want change and it becomes a battle over using an European model.

What ever happened to the good old fashioned American ingenuity of borrowing and stealing and reworking to fit American society?

and the USA economy is in no condition exactly similar to the shit that hit in Europe or in Europe as a whole.

We are not Europe and it is conservatives who want America to be more like Europe. Saying the USA is becoming like Europe and we need an European fix. Bullshit!

Yeah...that's what us conservatives are always saying...America needs to be more like Europe!!! (eye-roll)

Did you take a stupid pill today, Dante because THAT statement is about as stupid as they come!

 

[Oldstyle]

Wrong wrong wrong!! Too perfectly stupid and liberal as usual!!! You are like a tiny child. Yes, in theory our government could spend $100 trillion tomorrow, print the currency to pay for it and in one sense not be bankrupt at all because it had printed every dollar of the $100 trillion and paid its bills.....,but, it would cause a huge bubble, huge inflation, and a huge depression.

Therefore, it is better to consider the government, in effect, bankrupt whenever its debt is a significant percent of GDP. This is the way we protect ourselves from liberal bubbles, liberals inflations, and liberal depressions.

Was that simple enough for you??

Zimbabwe may not be technically bankrupt, but if we follow their example, we'll all be paying for our bread with $1,000,000 bills.

Zimbabwe had eighty percent of its industrial capacity wiped out from civil war, and it had its debts denominated in US dollars, which is what caused the hyperinflation. As they printed money, it wasn't being off-out by an increase in real goods and services, which is what caused hyperinflation. All US debts are denominated in US dollars, so the US will always be able to pay its debts.

You're sort of right, Kimura...but if you really think about it...you're completely wrong. Yes, the US can always pay it's debts by printing more dollars. But the people who loan us the money to keep our ship of state afloat aren't stupid...if the value of a dollar decreases then the cost of the loan will be adjusted to reflect that. Our creditors are not going to loan us billions in currency that's worth something only to have us turn around and pay them back in currency that isn't. So yes...we will be able to "pay" our debts but nobody will will oan us money if we don't repay them with something that's worth their investment. This concept that we can keep on doing what we're doing now and somehow wave a "magic economic wand" in the air and have it all work out is amusing.

 

[Kimura]

Zimbabwe may not be technically bankrupt, but if we follow their example, we'll all be paying for our bread with $1,000,000 bills.

Zimbabwe had eighty percent of its industrial capacity wiped out from civil war, and it had its debts denominated in US dollars, which is what caused the hyperinflation. As they printed money, it wasn't being off-out by an increase in real goods and services, which is what caused hyperinflation. All US debts are denominated in US dollars, so the US will always be able to pay its debts.

You're sort of right, Kimura...but if you really think about it...you're completely wrong. Yes, the US can always pay it's debts by printing more dollars. But the people who loan us the money to keep our ship of state afloat aren't stupid...if the value of a dollar decreases then the cost of the loan will be adjusted to reflect that. Our creditors are not going to loan us billions in currency that's worth something only to have us turn around and pay them back in currency that isn't. So yes...we will be able to "pay" our debts but nobody will will oan us money if we don't repay them with something that's worth their investment. This concept that we can keep on doing what we're doing now and somehow wave a "magic economic wand" in the air and have it all work out is amusing.

The US government doesn't have to borrow that which it creates as the sovereign issuer of the currency. We really aren't 'loaned' money. The federal government spends/creates money by writing Treasury checks or by crediting private, commercial bank accounts. For example, when the Chinese purchase US Treasuries, it uses dollars that come from government spending itself. Those dollars had to come from somewhere. Treasuries are basically glorified savings accounts at the end of the day. In point of fact, all bond sales do is drain excess reserves in the banking system, that's about it.

 

[Norman]

Zimbabwe had eighty percent of its industrial capacity wiped out from civil war, and it had its debts denominated in US dollars, which is what caused the hyperinflation. As they printed money, it wasn't being off-out by an increase in real goods and services, which is what caused hyperinflation. All US debts are denominated in US dollars, so the US will always be able to pay its debts.

You're sort of right, Kimura...but if you really think about it...you're completely wrong. Yes, the US can always pay it's debts by printing more dollars. But the people who loan us the money to keep our ship of state afloat aren't stupid...if the value of a dollar decreases then the cost of the loan will be adjusted to reflect that. Our creditors are not going to loan us billions in currency that's worth something only to have us turn around and pay them back in currency that isn't. So yes...we will be able to "pay" our debts but nobody will will oan us money if we don't repay them with something that's worth their investment. This concept that we can keep on doing what we're doing now and somehow wave a "magic economic wand" in the air and have it all work out is amusing.

The US government doesn't have to borrow that which it creates as the sovereign issuer of the currency. We really aren't 'loaned' money. The federal government spends/creates money by writing Treasury checks or by crediting private, commercial bank accounts. For example, when the Chinese purchase US Treasuries, it uses dollars that come from government spending itself. Those dollars had to come from somewhere. Treasuries are basically glorified savings accounts at the end of the day. In point of fact, all bond sales do is drain excess reserves in the banking system, that's about it.

So basically you are saying US can wave the magic wand and print that 1 trillion of money a year instead of going into debt. And there is not going to be a slightest difference. Not even an opportunity cost of not being able to print more money.

So basically, Fed is magic.

In fact let's get rid of all taxes and just print the money to opereate the government. And print some more to make the entitlement bomb vanish. What, there are poor and sick people? PRINT!

 

[EdwardBaiamonte]

You're sort of right, Kimura...but if you really think about it...you're completely wrong. Yes, the US can always pay it's debts by printing more dollars. But the people who loan us the money to keep our ship of state afloat aren't stupid...if the value of a dollar decreases then the cost of the loan will be adjusted to reflect that. Our creditors are not going to loan us billions in currency that's worth something only to have us turn around and pay them back in currency that isn't. So yes...we will be able to "pay" our debts but nobody will will oan us money if we don't repay them with something that's worth their investment. This concept that we can keep on doing what we're doing now and somehow wave a "magic economic wand" in the air and have it all work out is amusing.

The US government doesn't have to borrow that which it creates as the sovereign issuer of the currency. We really aren't 'loaned' money. The federal government spends/creates money by writing Treasury checks or by crediting private, commercial bank accounts. For example, when the Chinese purchase US Treasuries, it uses dollars that come from government spending itself. Those dollars had to come from somewhere. Treasuries are basically glorified savings accounts at the end of the day. In point of fact, all bond sales do is drain excess reserves in the banking system, that's about it.

So basically you are saying US can wave the magic wand and print that 1 trillion of money a year instead of going into debt. And there is not going to be a slightest difference. Not even an opportunity cost of not being able to print more money.

So basically, Fed is magic.

In fact let's get rid of all taxes and just print the money to opereate the government. And print some more to make the entitlement bomb vanish. What, there are poor and sick people? PRINT!

yep, he's a 100% ignorant liberal looking for the free lunch that doesn't exist.