patrick.net

The problem with austerity is that it's directed at the Middle Class rather than the bankers and other idiots who fucked up the economy. I'm sure that imposing austerity on the capital class will motivate them to not fuck things up.

Dan8267 says

The problem with austerity is that it's directed at the Middle Class rather than the bankers and other idiots who fucked up the economy. I'm sure that imposing austerity on the capital class will motivate them to not fuck things up.

Exactly. Austerity should mean plugging loopholes in the tax code, such as deductions for carried interest and not taxing overseas corporate profits until they're repatriated. We also need to ensure that all taxes that are owed get paid. Offshoring to prevent taxation must be stopped and the guilty parties must be made an example of. Finally, we need a small transaction tax that would be set aside for future financial collapses. Markets are too large and too integrated not to have a back up that doesn't require taxpayers to pay for losses.

Unfortunately those that run our government are bought and paid for by those who like the status quo just fine, so none of this will ever get done. Instead, they'll use chained CPI to ensure Social Security doesn't keep up with inflation.

Reinhart and Rogoff are saying: increase taxes and cut spending to reduce debt to improve growth long term because growth is slow when debt loads are high.

Krugman is saying: increase spending and print because deficits don't matter.

Reinhart and Rogoff sound more logical.

Agree with Vicente and futuresmc that austerity right now is directed at the wrong places.

Austerity doesn't work. There are no examples of it working.

Austerity is about paying off bad loans initiated by private banks while letting infrastructure, education, and the future to go into the toilet.

thunderlips11 says

Austerity doesn't work. There are no examples of it working.

Austerity works when the debt load is not beyond a certain point where it cannot be repaid.

Plenty of individuals got out debt by reducing spending and making more money. However, plenty did not because their debt was too high.

Austerity is a byproduct of intense commercialization of everchanging interactive human actions. When these concerns are kept in the sphere of privatization, banking system malfeasance is summarily terminated, thus releasing heretofore captured capital into the mainstream economic engine.

SoftShell says

Austerity is a byproduct of intense commercialization of everchanging interactive human actions. When these concerns are kept in the sphere of privatization, banking system malfeasance is summarily terminated, thus releasing heretofore captured capital into the mainstream economic engine.

Verily?

treatmentreport says

Krugman is saying: increase spending and print because deficits don't matter.

Krugman is an idiot - Austerity would work if they started with him.

Austerity in this context has become a cog in a vast wealth redistribution engine, wherein the wealth of countries is looted by the banksters who were part of the cause of the crisis, and the citizens who mostly had no culpability wind up indebted to them.

If austerity meant "everyone in the society tightening belts and shouldering burdens equitably" it would be a fair and effective plan.

On the other hand, borrowing during tough times against the expectation of better times in the future when the debt can be repaid is a perfectly legitimate economic strategy from the personal to the national level. When money can be borrowed at a lower interest than the rate of inflation, it becomes more favorable.
The caveat is, the borrowed money should stimulate the economy by paying for things like infastructure- roads, bridges, parks, transportation etc that durably benefit society as a whole. Blowing it on bombs and crony contracts, or other national equivalents of booze and dancing girls is the kind of borrowing that got us here.
The sidewalks in my shop's neighborhood are stamped W.P.A., and I have used many C.C.C. built campgrounds and trails. I'm grateful that people were put to work doing these things during the Great Depression, and we should be doing this now. I'd far rather America do this, than practice European-style austerity.

Vicente says

Austerity discredited

so says a government worker... could he whole statement be tainted with pro-union bias ?

Automan Empire says

The sidewalks in my shop's neighborhood are stamped W.P.A., and I have used many C.C.C. built campgrounds and trails. I'm grateful that people were put to work doing these things during the Great Depression, and we should be doing this now. I'd far rather America do this, than practice European-style austerity

meaningless... why do mindless liberals keep talking about building roads, sidewalks and brides to nowhere which provides for NO real economic growth..

while ignoring many nations as they are investing in factories and industrial parks to design and manufacture goods and provide services to be shipped world wide..

they saw the prosperity when we were the dominate designer/manufacture, only after their own economies laid in ruin after WW2. Time to wake up and be a prime player.

thomaswong.1986 says

meaningless... why do mindless liberals keep talking about building roads,
sidewalks and brides to nowhere which provides for NO real economic growth..

Infrastructure is not meaningless--it allows businesses to succeed.

thomaswong.1986 says

while ignoring many nations as they are investing in factories and industrial
parks to design and manufacture goods and provide services to be shipped world
wide..

You've got to be kidding. You're advocating government build factories?? Did you become a socialist when I was sleeping last night?

There is no shortage of almost free capital available right now--so there is absolutely no need for the government to build factories...

tatupu70 says

Infrastructure is not meaningless--it allows businesses to succeed

You drink deep of the Keynesian Kool Aid me thinks

treatmentreport says

Plenty of individuals got out debt by reducing spending and making more money. However, plenty did not because their debt was too high.

We're talking about countries, not individuals or households. Individuals can't print money, change the interest rates, use the discount window, set tax rates, adjust loopholes or taxes or regulations, create or remove subsidies, etc.

Also, people not infrequently declare bankruptcy when their ability to pay can never reasonably service all their debt.

Jubilee is a perfectly reasonable solution, but we're not there yet. Simply reverting to the tax rates of the late 80s/early 90s would solve most of our problems.

indigenous says

You drink deep of the Keynesian Kool Aid me thinks

Because I understand that infrastructure is important? I think that is not a Keynesian or Austrian theory, but rather a universal understanding.

If you tried to build a factory in Somalia, don't you think there might be a few more costs than if you tried to build one in the US?

I somehow doubt that a factory with a third level that can only be reached by a ladder, in Somalia will be required to have a Wheelchair accessible restroom.

thomaswong.1986 says

liberals keep talking about building roads, sidewalks and brides to nowhere

Who said anything about it being to nowhere?

59% of roads in poor to fair condition
31% of bridges deficient or obsolete
33% of school buildings need repair
12% of dams are high-hazard due to deterioration

www.apwa.net

Wasn't the Bridge to Nowhere something that was lobbied for by the lady and Senator Internet-is-a-Series-of-Tubes from Alaska, both republicans?

BTW, what ever happened with the "Bandwidth is clogged with porn and illegal movie downloads" bullshit story put out by the cable companies?

thomaswong.1986 says

meaningless... why do mindless liberals keep talking about building roads, sidewalks and brides to nowhere which provides for NO real economic growth..

while ignoring many nations as they are investing in factories and industrial parks [snip]
when we were the dominate designer/manufacture, only after their own economies laid in ruin after WW2. Time to wake up and be a prime player.

Interesting... so government has no place in building infastructure for the common good, and durable projects like roads and bridges that benefit everyone are bad...

Yet instead, the place of government is to build factories? As in, own the means of production, communist-style, or serving as the face of industrial titans, fascist-style? Or picking winners like Solyndra? How does a screed against liberals go this direction?

thomaswong.1986 says

why do mindless liberals

Only a moron would use the term "mindless liberal". Liberal philosophy is strongly correlated with intelligence, education, thoughtfulness, scientific achievement, mathematical prowess, and penis length (even in women, that's how strong the correlation is).

Social conservatism is associated with wife beating, slavery, alcoholism, religiousness, high school drop-out rates, the likelihood that your parents are siblings, and the belief that the sun revolves around the Earth, which is only 6,000 years old. Social conservatism has also been shown to have an inverse relationship to the number of teeth a person has.

Dan8267 says

Social conservatism is associated with wife beating, slavery, alcoholism,
religiousness, high school drop-out rates, the likelihood that your parents are
siblings, and the belief that the sun revolves around the Earth, which is only
6,000 years old. Social conservatism has also been shown to have an inverse
relationship to the number of teeth a person has.

And teen pregnancy, you left out the "family values" part.

Dan8267 says

Social conservatism has also been shown to have an inverse relationship to the number of teeth a person has.

Hence the all important teeth to tattoo ratio.

Dan8267 says

Liberal philosophy is strongly correlated with intelligence, education, thoughtfulness, scientific achievement, mathematical prowess, and penis length (even in women, that's how strong the correlation is).

really ! you mean all the mindless liberals chasing social injustice back in the 60s/70s and abandoning the education system and the "corporate industrial complex' compare to the many conservatives who went into Engineering, Business, Science and other trade business which created the information revolution.

Its the same today, liberals like you whale at the evil 'corporate industrial complex'.

When did you all of sudden decide to join the IBM world putting on a business suit with white shirt and black tie ? You abandoned this world.. dont try to take credit where its not deserved.

thomaswong.1986 says

you mean all the mindless liberals chasing social injustice back in the 60s/70s and abandoning the education system and the "corporate industrial complex' compare to the many conservatives who went into Engineering, Business, Science and other trade business which created the information revolution.

Wtf are you talking about. I've been a software engineer my entire adult life. I've worked with IBM and I've known a hell of a lot of IBMers and other engineers. Almost all software engineers and STEM graduates in general are liberals.

You don't have a freaking clue as to what a liberal is, do you? Even though I've told you a thousand times already. That's just sad. Still, your posts show the utter bigotry and contemptibility of the right.

treatmentreport says

Krugman is saying: increase spending and print because deficits don't matter.

Typical right-wing lie. Krugman is not saying that. This is what he is saying:

http://krugman.blogs.nytimes.com/2013/03/31/the-ecb-and-the-austerity-trap/

As he suggests, the crucial place to start is with why Wren-Lewis, Brad DeLong, Martin Wolf, Larry Summers (at this point, anyway), yours truly, and more are against austerity now. We’re not always and everywhere against fiscal consolidation; give me the right economic circumstances and I’ll turn at least modestly deficit hawk. We are, instead, against austerity when the interest rate is against the zero lower bound, because when the economy is in a liquidity trap the contractionary effects of fiscal tightening can’t be offset by monetary expansion.

So do the austerians reject this argument? No — they basically fail even to acknowledge that it exists.

Right-wingers invent lies because the truth is not good enough for their propaganda purposes.

Dan8267 says

The problem with austerity is that it's directed at the Middle Class rather than the bankers and other idiots who fucked up the economy. I'm sure that imposing austerity on the capital class will motivate them to not fuck things up.

That's exactly right. In particular, let us impose retroactive austerity taxes and penalties on all the ill-gotten gains from the criminal behaviors that caused the housing bubble and the private debt bubble.

justme says

Dan8267 says

The problem with austerity is that it's directed at the Middle Class rather than the bankers and other idiots who fucked up the economy. I'm sure that imposing austerity on the capital class will motivate them to not fuck things up.

That's exactly right. In particular, let us impose retroactive austerity taxes and penalties on all the ill-gotten gains from the criminal behaviors that caused the housing bubble and the private debt bubble.

I'd go with that, but that's actually proof that austerity works. In fact, you would not even have to introduce any legislation, just apply existing law, prosecute the fraud, jail the responsible parties and claw-back the money. It's a myth that claw-backs are not possible, in fact they are exercise by financial companies themselves when they see fit.