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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 lizzie View Post
    It will be, by necessity. We tend to ignore realities until we have to pay dearly for them.
    I guess my argument would be that if Europe is a good indication and austerity leads to negative GDP growth are we really digging ourselfs out of debt or do we just end up digging ourselves deeper while experiencing the pain of austerity.
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by iliveonramen View Post
    I guess my argument would be that if Europe is a good indication and austerity leads to negative GDP growth are we really digging ourselfs out of debt or do we just end up digging ourselves deeper while experiencing the pain of austerity.


    It looks to me as if we will keep digging ourselves deeper, until we hit a brick wall. I suppose we will find out eventually.
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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by Somerville View Post
    How was WWII paid for? What was the GDP to national debt ratio at the end of the war?
    Massive tax hikes and even more massive inflation.

    From 1940 through 1950, the government created as much money as it needed for the war, and because of this we lost about 58% of the value of the dollar in that decade.

    If something cost $100 in 1940, it then costed $172 in 1950.
    If you had $1,000 in the bank in 1940, during that decade losing 58% of the value of your money, you would have the 1950 equivalent of $420.

    Most people are completely ignorant when it comes to inflation, it says wonders for our education system.

    Sources:
    http://www.inflationdata.com/inflati...inflation.aspx
    Inflation Calculator | Find US Dollar's Value from 1913-2012
    Quote Originally Posted by LowDown View Post
    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 RabidAlpaca View Post
    The housing crisis was simply the match that lit the powder keg that is the recession that we are in today.

    The housing crisis was caused by two major things.
    -1. The federal reserve kept interest rates too low for too long, giving a massive amount of practically free credit to the major banks.
    -2. The banks created credit default swaps for the subprime mortgages and other sectors of their risk. They considered this the holy grail of banking, they could make as many loans as they want to whoever would take the money, then they could package the risk on those subprime loans into a bundle, and sell the bundle to other banks around the world.

    You're absolutely right about it being a world wide bubble, everyone and their moms were trading credit default swaps, and very few people knew what they actually were.

    Along came one day when a large number of the subprime lendees declared bankruptcy, sending shockwaves through the banking system. This first bank to go was Bear Sterns, which got a bailout and was sold to JP Morgan, the second was Lehman Bros, who didn't get a bailout, and bit the dust. One after another, the banks begin to collapse when their artificially created bubble popped, and we, the tax payers were left without a chair when the music stopped.

    So in short, it was the Fed's AND the bank's fault, and it wasn't an isolated american incident. It was international, like you suggested, we all bear the blame.
    Actually, I don't think "we all" share the blame, especially as you point out, this was primarily driven by investment banking (really horrible bs investment banking) that was betting on the crash. The investment banks got the lower regs, were able to keep Greenspan from going with Born's warnings on derivatives and no one was doing much on controlling the huge sums of investment dollars entering the markets in the late 90's/early 2000's. It was too much cash chasing too few decent investments...the recipe for bubbles, and we now see them in dotcom ('99), oil ('06) housing (03-06).
    Quote Originally Posted by trouble13 View Post
    If you wanna know why Trumpsters are ignoring you its for the same reason you ignored the KKKs complaints about Obama.
    Quote Originally Posted by Moderate Right View Post
    When it comes down to it, all facts are cherry picked.
    Quote Originally Posted by Bodhisattva View Post
    He didn't say it didn't make sense. He said it is complete nonsense.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by iliveonramen View Post
    I guess my argument would be that if Europe is a good indication and austerity leads to negative GDP growth are we really digging ourselfs out of debt or do we just end up digging ourselves deeper while experiencing the pain of austerity.
    Europe is screwed for a lot of reasons, but I personally believe they are better off. They are taking their hit early, and it's horrific for them. We however are pushing it off and propping up our economy with fake money, prolonging the inevitable. I think we're going to crash harder than they did.
    Quote Originally Posted by LowDown View Post
    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 RabidAlpaca View Post
    Massive tax hikes and even more massive inflation.

    From 1940 through 1950, the government created as much money as it needed for the war, and because of this we lost about 58% of the value of the dollar in that decade.

    If something cost $100 in 1940, it then costed $172 in 1950.
    If you had $1,000 in the bank in 1940, during that decade losing 58% of the value of your money, you would have the 1950 equivalent of $420.

    Most people are completely ignorant when it comes to inflation, it says wonders for our education system.

    Sources:
    http://www.inflationdata.com/inflati...inflation.aspx
    Inflation Calculator | Find US Dollar's Value from 1913-2012
    Wage growth out paced the rate of inflation....you're giving a much bleaker depiction of post-World War II than reality. Real wage growth increased all the way until the 1970's. The dollar may of been less but the average individual could still purchase more in 1950 than he could pre 1945.
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by lizzie View Post
    Assuming you have been seeing the rioting in Europe as a result of the austerity measures, I'm figuring you know where the cuts are being made. If those cuts into social welfare spending were not absolutely necessary, I highly doubt we would be seeing them.
    Folly is believing that humans can live and exist outside the laws of nature. As hard as they may be to accept, they work.
    No, and if you had any conception of EU or US economies, you would understand that it was not social spending that caused the crash in the first place. Further, the worst thing to do in a low demand/tight credit economy is to pull back on govt spending.

    Economies are constructs of humans, they are human nature.
    Quote Originally Posted by trouble13 View Post
    If you wanna know why Trumpsters are ignoring you its for the same reason you ignored the KKKs complaints about Obama.
    Quote Originally Posted by Moderate Right View Post
    When it comes down to it, all facts are cherry picked.
    Quote Originally Posted by Bodhisattva View Post
    He didn't say it didn't make sense. He said it is complete nonsense.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    BBC News - Spanish unemployment hits record 5.64 million

    Looks like they're going to go austerity in Spain, which will piss off the unions.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: Krugman Wishes He Were Wrong Amid EU Austerity Backlash

    Quote Originally Posted by iliveonramen View Post
    Wage growth out paced the rate of inflation....you're giving a much bleaker depiction of post-World War II than reality. Real wage growth increased all the way until the 1970's. The dollar may of been less but the average individual could still purchase more in 1950 than he could pre 1945.
    That very well may be true, but it doesn't change the fact that the government took well over half of the savings of every man, woman and child in america. I realize desperate situations require desperate measures (not saying I support it), I was simply explaining to Somerville some of the ways the war was paid for.
    Quote Originally Posted by LowDown View Post
    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 lizzie View Post
    It looks to me as if we will keep digging ourselves deeper, until we hit a brick wall. I suppose we will find out eventually.
    Honestly Lizzie if a self induced global depression is the only way forward then we're screwed no matter what.
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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