When has austerity ever worked?

[Dovahkiin]

I will wait for an answer.

 

[Lakhota]

Republicans have been pushing austerity since Obama became president - and only the yachts have lifted.

Democrat high tide lifts all boats.

Republican high tide lifts all yachts.

 

[Dovahkiin]

Republicans have been pushing austerity since Obama became president - and only the yachts have lifted.

Democrat high tide lifts all boats.

Republican high tide lifts all yachts.

Obama isn't any better. Both parties are under the spell of neoliberal nonsense coupled with gold standard concepts that simply don't apply to the modern economy. They still think this way though. Obama praising deficit reductions, an extremely weak recovery thanks to such low deficits, him talking about us "running out of money," which is absolute nonsense since money is created from thin air.

 

[OKTexas]

I will wait for an answer.

1923

 

[Lakhota]

Republicans have been pushing austerity since Obama became president - and only the yachts have lifted.

Democrat high tide lifts all boats.

Republican high tide lifts all yachts.

Obama isn't any better. Both parties are under the spell of neoliberal nonsense coupled with gold standard concepts that simply don't apply to the modern economy. They still think this way though. Obama praising deficit reductions, an extremely weak recovery thanks to such low deficits, him talking about us "running out of money," which is absolute nonsense since money is created from thin air.

Aw shit, I thought you were sane. Bye..

 

[sonic]

It hasn't. Ryan's austerity plan just flat out will not work, as stated by many many economists. Republicans have no answers. All they have is failed theories and saying no to everything anyone else wants to try. Out of this we now have the worlds biggest ahole - Trump and his uneducated non-thinking disciples.

 

[Dovahkiin]

I will wait for an answer.

1923

Absolute nonsense.
Let's examine the period in question, along with some other simple facts:
We first realize this:
6. 1920-30: In 11 years, the debt was reduced by 36 percent, to $16.2 billion. A depression began in 1929.
Think big deficits cause recessions

Well ain't that something? It's odd that everytime we do debt reduction/run a surplus, a depression/recession follows. The link I've supplied backs this up. Now, when have we ever experienced a depression/recession due to large deficits? I will wait for an answer.
Anyways, back to the period in question:
A massive increase in private sector debt can indeed lead to growth, it's not sustainable though. This can be observed when looking at history, although I implore you to look to the massive private sector debt increase once clinton shrunk deficits/ran the surplus, and the build up to the crash in 07-08 due to bush running small deficits and the way the private sector continued to ramp up debt/take insane risks. When the private sector doesn't have access to dollars as pure assets from another sector, the only way for the private sector to acquire dollars is through loans. Money is debt after all.

 

[Dovahkiin]

Republicans have been pushing austerity since Obama became president - and only the yachts have lifted.

Democrat high tide lifts all boats.

Republican high tide lifts all yachts.

Obama isn't any better. Both parties are under the spell of neoliberal nonsense coupled with gold standard concepts that simply don't apply to the modern economy. They still think this way though. Obama praising deficit reductions, an extremely weak recovery thanks to such low deficits, him talking about us "running out of money," which is absolute nonsense since money is created from thin air.

Aw shit, I thought you were sane. Bye..

Show me what I'm wrong about.

 

[bripat9643]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1923 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

 

[Dovahkiin]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1921 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

You mean a period built on spending higher then pre war levels, a build up in private sector debt, and the crash that followed?

 

[leftwinger]

I hope for simple answers from a real Economist.

1. I don't understand how the FED can "print" $4T and give it to the FED GOVT w/o cause bad?
2. How can it be good for $0.5T of budget is to pay interest only on loan? (principal keeps increasing)?

answer to OP: it seems some states have turned around thru "forced" austerity. Canada around 2009?

 

[Dovahkiin]

I hope for simple answers from a real Economist.

1. I don't understand how the FED can "print" $4T and give it to the FED GOVT w/o cause bad?
2. How can it be good for $0.5T of budget is to pay interest only on loan? (principal keeps increasing)?

answer to OP: it seems some states have turned around thru "forced" austerity. Canada around 2009?

1.) Elaborate.
2.) We simply credit accounts, not a problem at all.
Canada has good exports.

 

[bripat9643]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1921 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

You mean a period built on spending higher then pre war levels, a build up in private sector debt, and the crash that followed?

What part of "cut spending by 50%" didn't you understand?

 

[Dovahkiin]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1921 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

You mean a period built on spending higher then pre war levels, a build up in private sector debt, and the crash that followed?

What part of "cut spending by 50%" didn't you understand?

Look at pre war spending.

 

[leftwinger]

1.) Elaborate.

I am in over my head but..........There was X amount of money in supply. FED added ~$4T buying GOVT debt? and maybe stocks to prop up market? They did not earn this money, they manufactured it. Nothing was created, no work? How come nothing bad happened? This was a 4X increase in money?

 

[Dovahkiin]

1.) Elaborate.

I am in over my head but..........There was X amount of money in supply. FED added ~$4T buying GOVT debt? and maybe stocks to prop up market? They did not earn this money, they manufactured it. Nothing was created, no work? How come nothing bad happened? This was a 4X increase in money?

Banks create money from thin air all the time, most of it is simply offset by a matching asset, so the rate is very slow, but it does happen. The fed simply credits accounts, not a problem at all. How do you think we get dollars as an asset?

 

[bripat9643]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1921 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

You mean a period built on spending higher then pre war levels, a build up in private sector debt, and the crash that followed?

What part of "cut spending by 50%" didn't you understand?

Look at pre war spending.

So any time spending was lower in the past then it is currently, that's not "austerity?"

 

[bripat9643]

1.) Elaborate.

I am in over my head but..........There was X amount of money in supply. FED added ~$4T buying GOVT debt? and maybe stocks to prop up market? They did not earn this money, they manufactured it. Nothing was created, no work? How come nothing bad happened? This was a 4X increase in money?

Banks create money from thin air all the time, most of it is simply offset by a matching asset, so the rate is very slow, but it does happen. The fed simply credits accounts, not a problem at all. How do you think we get dollars as an asset?

You're delusional or ignorant if you think debasing the currency is "not a problem."

 

[Dovahkiin]

I will wait for an answer.

Cutting government, what you call "austerity," has worked every time it has been tried. A famous example is in 1921 when Calving Coolidge cut government spending by 50%. He also cut the top marginal rate from 95% to 25%. The result was what historians call "the roaring 20s."

You mean a period built on spending higher then pre war levels, a build up in private sector debt, and the crash that followed?

What part of "cut spending by 50%" didn't you understand?

Look at pre war spending.

So any time spending was lower in the past then it is currently, that's not "austerity?"

You don't understand, a massive build up in private sector debt came with the austerity.

 

[leftwinger]

Banks create money from thin air all the time, most of it is simply offset by a matching asset, so the rate is very slow, but it does happen. The fed simply credits accounts, not a problem at all. How do you think we get dollars as an asset?

more lost? Only FED RESERVE can manufacture money correct? not Banks like B of A? They can only use deposits on hand? Are you saying banks can lend out more than they have on deposit?