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Thread: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by PeteEU View Post
    First off that article is from 2010.

    The tax evasion problem varies from 15 to 20 billion a year. The deficit for 2011 came in around 18 billion.
    Where the hell do you get this crap from? Billion what?

    This is getting a bit silly.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Meathead View Post
    Very strange then that Greece went belly-up. For years Greece essentially followed Krugman's ideas (austerity being for suckers) and wound up bankrupt and panhandling in the capitals of Europe.
    Exactly. And they most certainly did run out of others people's money, where even with what is equivelent to about 50% write-downs, they still seem to lack the backbone to suck-it-up.

    With France reverting back to its noodle-spine self by voting in a Socialist again, the EU is screwed. Soon as you give the European parasites an inch of slack, they take another mile.

    They are out of other people's money, a concept that socialists cannot comprehend. We'll watch them feed on each other from here.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by FilmFestGuy View Post
    Wait...so you think austerity is making things better for Greece? Spain? Ireland is the closest thing to a success, but they've only just experienced their first quarter of growth, while we here in the US have had 11 straight quarters of growth. The UK's austerity program has resulted in 4 of their last 6 quarters shrinking and their highest quarter of growth post-recession is a mere 1/3 of what our best quarter has been.

    It hasn't been a success anywhere. It results in slow growth or (worse) a return to recession, which (as we know) only makes debt grow due to lower tax receipts. That's why debt is growing in the countries who have instituted these policies instead of shrinking. Stimulate first; then deal with the debt when the economy has recovered. There's a reason why it's been done that way for a long time; because it works.
    They have two choices: Austerity or Default. Their third choice, blowing money they do not have, hit that inevitable snag. No one is going to loan them money anymore. You wanna buy a Greek bond right now ? They promise high return.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Gimmesometruth View Post
    Where are you getting that Ireland is "doing well"? By what measure?
    Ok, relatively they did better. Look at your own chart, their GDP is increasing. It is not in freefall like other European countries. They are also ahead of schedule in their austerity.


    The problem with Greece goes back much further, they did not have an economy that really allowed them to be a full member in the Euro along with their inability to collect taxes in a sufficient manner, but the bigger problem was the speculating and over-valuation of Greek properties/businesses. Now they are defaulting from the world-wide recession. It is up to the EU whether it wants to lose a member state (and I think that would be a good thing for Greece to do, they need to regain control over their own currency).
    There is always going to be someone irresponsible in a currency union. The euro was a mistake, because it was based on political and not economic reasons. The euro lets countries decide their own wage level, but to be competitive then you need to have a wage level corresponding to your current account. With currencies, then countries who inflate their wage levels will experience inflation. In the EU, it means large current account deficits, and then a complete crash. Because of the euro, the countries can't adjust and the other countries are dependant on them. The euro means that any country being irresponsible can drag the whole region down. Imagine it was France, and not Greece.

    Ah, the confidence fairy tale.
    Austerity, the reduction of govt spending on top of reduced private demand will always lead to extended, deeper recessions. We already know that.
    Fairy tale? Are you kidding me? It is probably the most important factor in an economy. If people have no confidence the economy will recover, then they won't invest. If they believe the politicans are going to mess up the economy, then they won't invest. That is basic economics, and common sense.

    Reduction of government spending will of course lead to deeper recessions, but sometimes it is neccecary. Its not like it will never work. As I have pointed out, Ireland was probably in the worst situation, and they are doing ok now. Also, Iceland cut massively over one year. Their GDP dropped massively. But after a year or two it got better. The much better way is to fix the situation fast, so the economy and people can recover. Don't drag it out.
    Last edited by Camlon; 05-06-12 at 08:46 PM.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by FilmFestGuy View Post
    And you got your economics degree from where? Because you're going to have to do a LOT more work than this to try to outdo Krugman.
    Can you outdo Milton Freidman? Does that mean I can use Milton Friedman as a reference. He also won a nobel price. He even got it in something that was relevant to what he talked about daily. Krugman got it for trade theories, and even on that field he is weak.

    Reality is, they won their price for influencing people, they did not win the price for being good economists. In fact they are both terrible economists, because their agenda prevents them from doing proper research. Secondly, just because you are an economist, does not mean you are correct. Or else, the crisis wouldn't have occoured. A crisis Krugman thought would be a slowdown. He also predicted it to happen in 2006 and kept revising.

    To cite Krugman is like citing Bill Maher or Bill O'reilly. That may work on Fox News or Democratic Underground, but not here.

    Greece cooked their books, which is why their problem is by far the worst. But austerity has stalled out their economy entirely. The same thing is happening in Spain, which is the Eurozone's third biggest economy and could be a MASSIVE problem for the world economy if they collapse. The only way out of recession is spending.
    Really, what about Japan? They did exactly that, they just kept spending and their economy never recovered. Because of the spending, bad debt was never liquidated. And because of the spending, then their public debt went out of control. Also, Ireland and Iceland didn't do badly. What about Latvia? They had a fall of 18% of GDP over one year, current account deficit was at 20%. Unemployment rose to 20%. Now, they have a 6% growth, positive balance sheet, positive current account and an unemployment of 14%.

    There needs to be a balance, and we need to look at other factors such as confidence. If you keep lying like Greece and the EU did, then who knows what will happen tomorrow. Two really bad years is better than a miserable decade. It also gives the economy the possibility to recover and rebalance.

    History and present conditions prove that austerity is a failure during a recession.

    Austerity's Greatest Failure - Matthew O'Brien - Business - The Atlantic
    Dumbest article I have ever read. It pretty much goes like this, Uh... US got a lower bond yield than Portugal, and the same as UK, and did no austerity. That means austerity is bad. Why do you cite it? It makes you look dumb.

    Also, UK did not do much austerity. Then they wouldn't have got an inflation rate of 5%. That is one of the things Friedman proved. That high inflation was caused by the government inflating the money supply, which is the opposite of austerity.

    “It took 30 years of frivolous public spending to bring the country to a debt-to-GDP ratio of 120%. Two years of severe austerity brought debt to 168% of GDP. Obviously the medicine didn’t work.”

    (from this article)
    The austerity didn't bring it to 168% of GDP. The crisis did.

    There's ample evidence that austerity is a failure as a policy.
    I must say your evidence is pretty terrible. Even I can make better arguments than that for your point.

    I can tell you what does not work. Having an outside country telling a country what to do, and essentially removing your democracy. Because guess which country is going to be blamed, if it goes haywire? Also, imposed austerity is much tougher to accept. EU shouldn't have tried to control Greece, let the Greeks find out where they want to cut.
    Last edited by Camlon; 05-06-12 at 09:39 PM.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Camlon View Post
    ............... Reduction of government spending will of course lead to deeper recessions, but sometimes it is neccecary. Its not like it will never work. As I have pointed out, Ireland was probably in the worst situation, and they are doing ok now. Also, Iceland cut massively over one year. Their GDP dropped massively. But after a year or two it got better. The much better way is to fix the situation fast, so the economy and people can recover. Don't drag it out.
    I shortened your post, but it was all good. However, the above paragraph is a perfect example to illustrate the leadership needed to get us out of the morass, and how Obama does not possess it.

    In the early very late 70's and early '80's, one of the big anchors on the economy was inflation. Reagan took over one heck of a mess, where a big part of the solution meant a continued shrinking of the money supply, working with Volker. A perfect example of staying the course with a remedy that made things tough in the short term, but was the only way to fix things long term. We endured unemployment of about 10.8% in Reagan's second year, as the foundation was mended, and still trusted his leadership. "Stay the Course" was the motto for the '82 midterms, and Reagan did very well all things considered. And in '84 he won like 525 electoral votes. Obama sure ain't doing that this year. He's out on his ass if enough folks wake up.

    As noted, Reagan not only oozed confidence and leadership, but he also made the tough decisions that warranted that loyalty.

    Not Obama. Obama is like a piss-ant. He is an imposter in the arena of leadership. A joke. An incompetent.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Cephus View Post
    You say that like the left has shown *ANY* inclination to adopt austerity measures or entitlement reform. They spend like drunken sailors and any talk about cutting entitlements is met with wails and gnashing of teeth. Stop pretending it's the Tea Party's fault. Who is in power right now? Who is running up the deficit to unheard of levels?
    And who started launching wars in the Middle East? Who began wars that were funded by the national credit card?

    Let's not forget that everyone is totally fine with that well known tax haven the Cayman Islands existing and not going after it.
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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Somerville View Post
    After 2-3 years of "austerity" programs, Europeans are starting to look at their economies in a different manner.



    'Somehow', in some mysterious fashion, the "failed" stimulus programs advocated and pushed for by the Administration have kept the US from falling back into recession. Now that the stimulus funding has ended, we are starting to see the economy here beginning to slow. Naturally those of the Austrian school think that this proves their point that government should spend even less.
    The EU is failing because they refuse to accept and tackle the real issue: the euro itself. Sharing a bank account with your neighbors is a preposterous idea, why anyone would consider it financially intelligent or viable is beyond me.
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    I've got to say that it is shadenfreudalicious to see the rich and famous fucquewads on the coast suffering from the fires.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Mr. Invisible View Post
    And who started launching wars in the Middle East? Who began wars that were funded by the national credit card?
    We've been doing it for many decades, meddling in the affairs of the nations of the Middle East to secure our cheap oil supply. No administration is beyond blame. It's no surprise they're pissed off at us, we've had our fingers in their business for a long, long time. When they can't challenge us militarily, politically or financially, what option is left to them? Terrorism. I'm not excusing it, but if the situation were reversed and there was a much more powerful nation pulling the same crap in the U.S. that we've pulled in the Middle East, we'd be doing the same thing to them.
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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Camlon wrote:
    Reduction of government spending will of course lead to deeper recessions, but sometimes it is neccecary. Its not like it will never work. As I have pointed out, Ireland was probably in the worst situation, and they are doing ok now. Also, Iceland cut massively over one year. Their GDP dropped massively. But after a year or two it got better. The much better way is to fix the situation fast, so the economy and people can recover. Don't drag it out.
    Nice to see a conservative acknowledge that cutting government spending will lead to "deeper recessions"

    "It's not like it will never work"? Really - could the commenter provide an example where it did work?

    Iceland shut down its three major banks and then told the creditors - "too bad, you ain't gettin' paid". Non-Icelanders who had deposited money in the closed banks were told - "Eh too bad." The value of the Iceland krona crashed on the international market, which then caused the price of imports to skyrocket but it made Iceland a much cheaper place to visit, which brought in money to the nation's economy.

    As there are only about 330,000 Icelanders, trying to compare the US economy with its 320,000,000 population, does seem to be a bit off.

    Now, think about the difference in the amount of offshore money that is in US banks and the amount that was in Icelandic banks - Do you honestly think that if US banks told those depositors - "Eh, too bad, you lost it" - that there would not be serious repercussions, repercussions that would affect the world's economy?

    Ireland: from the Irish Times
    Tax take for April down on same month last year
    TAX REVENUES in April were 1.3 per cent down on the same month last year at €2.08 billion, according to Department of Finance figures. This, however, was slightly better than expected on budget day.
    Government lowers official expectations for growth
    THE GOVERNMENT yesterday lowered its expectations for economic activity and employment in 2012 in its first economic forecast since December’s budget.
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