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Austerity does work. It is just there is a time and place for it. When the economy is weak austerity shrinks the already anemic economic activity further weakening the economy because the government is contracting its role as an economic participant and thus reducing the total economic activity.
On the other hand if the economy is strong austerity is great because it prevents economic overheating and curbs speculative bubbles.[/quote]
Except we didn't do that, now did we.
I agree. The key component is the government has to be disciplined enough to cut back in boom times. Unfortunately when times are good, the government goes on an even bigger spending spree or slashes taxes so that any opportunity of paying down debt is lost. If we don't learn to adjust during economic cycles, one day austerity will be forced on us. Carrying debt doesn't concern me as much as not addressing accumulated debt over the long term. Austerity in times of economic uncertainty is cutting your nose to spite your face. Right idea at wrong time. Unfortunately for many of the austerity hawks on the right side of the aisle, austerity is not so much about economic stability and is more of an ideological attempt to cripple and render the government impotent. Take away the purse, and the government is left with little to no power. At least that's the way I see it.
Good article on why austerity doesn't work in europe. Spain actually had a budget surplus back in 2007 before the downturn, now they have 26% unemployment. The answer to increased deficits was to cut government spending creating higher unemployment and larger deficits.
That's not the point of austerity though. Did you read the OP? No one said austerity would lead to economic recovery, just that it would get government finances under control.
Define "control". Who say's America's finances are out of control? Democrats have cut more than 1 Trillion dollars. Did Bush manage that? The goal is to force Democrats to destroy the middle class so the blame will fall on them. Austerity might work if you had been spendthrift in the first place. What if you aren't? What if you are just making ends meet? Are your kids music lessons wasteful spending? Is feeding them wasteful spending? Maybe you should give them over to Foster Care. You might want to give up one of the porn site subscriptions you keep up if things are to the point of looking hard at your kids extra-curricular activities. Greek billionaires have parked 27 billion dollars outside of the Greek economy. You think that wouldn't be noticed? So... should Greek teachers work without pay because of that?? Should American postal workers be furloughed an extra day a week because the IRS is too chicken**** to go after millioniare tax cheats? The LOSS to the American economy of all the furlough days and all the lay-off's is measured in billions of dollars. That is what Austerity does. It further depresses a depressed system. You have to keep making your car payments if you need a car to get to your job!
The US has not undergone any austerity measures. Oh that 2% FICA tax you say ?
Hogwash.
Maybe that's why the military is practicing Blackhawk sweeps with bullets flying in urban areas..cause were going to have to go austerity sooner or later.
Greece has been on that path for 4 years now and each year brings a new emergency bailout with even tougher "austerity measures".
And they are no closer to recovery than they were 4 years ago.
You shouldn't have to ask when you have 4 years of data right in front of you..Europe.
Greece hasn't cut spending. In 2009 Greece spent 8400-9800 million in each quarter. Except for that year, from the first quarter of 2007 through the first quarter of 2011 spending was between 7900-8330 million.
Location: By the sea, by the sea, by the beautiful sea
68,329 posts, read 54,381,135 times
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Quote:
Originally Posted by VTHokieFan
The point of austerity is to cut government spending to get out of control state finances under control, not to jump start the economy. Why do liberals use economic growth as the standard when assessing the success of austerity measures? Everyone knows deep cuts to spending doesn't produce short term economic growth: that's not the point of austerity, though.
Right after a conservative tell us why, despite claims to the contrary, they're perfectly willing to spend like drunken sailors on anything that suits their own agenda, the Romney/Ryan lock-step plan to spend more on an already bloated, over-priced military being a fine example.
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Location: Pine Grove,AL
29,551 posts, read 16,539,320 times
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Quote:
Originally Posted by VTHokieFan
That's not the point of austerity though. Did you read the OP? No one said austerity would lead to economic recovery, just that it would get government finances under control.
Can a liberal here tell me why austerity doesn't work?
Yes.
Quote:
Originally Posted by VTHokieFan
The point of austerity is to cut government spending to get out of control state finances under control, not to jump start the economy.
There you go. That's why.
Quote:
Originally Posted by VTHokieFan
Why do liberals use economic growth as the standard when assessing the success of austerity measures?
Because we actually do bleieve that to be the standard.
Quote:
Originally Posted by VTHokieFan
Everyone knows deep cuts to spending doesn't produce short term economic growth: that's not the point of austerity, though.
Too bad economic growth is the issue that needs most to be addressed.
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