gut;1167009 wrote:Good lord....let me try to say it more slowly and clearly for you.
The issue is FORCED austerity. They were out of options. What you are blaming "austerity" for is really attributable to out-of-control deficits and lack of available financing (i.e. NOT the case with Germany and Sweden, which is why they are able to have a more managed austerity program, the sort I've argued for). It is the typical debt overhang you can observe with companies in the stock market all the time.
And the one thing Barrow got right is you have no evidence the alternative to austerity is any better. None. It's just a belief Keynesians continue to hang on to despite evidence to the contrary in Japan and Europe. Massive deficit spending is unsustainable, yet that it exactly the logical fallacy you continue to commit in arguing against "austerity".
Flat out the bottom line is you can't run deficits forever. There is a tipping point that Europe is past, and the US is barreling toward. You don't seem to understand this. I don't disagree with Keynesian economics, but there clearly are limits you and the diehards are incapable of acknowledging.
First of all you say "what is happening is attributable to out of control deficits." Spain was not a fiscally profligate country. They did not run out of control deficits. They ran surpluses and they are still in deep shit.
Spain could've spent the surpluses they had saved on productive activity instead of firing people and putting them on the dole; or, Germany and France didn't have to impose the morality play austerity on the PIGS.
Also, there is lots of evidence that keynesian cyclical spending works; especially to counteract depressions. WWII is exhibit A. Additionally, the IMF has run experiments with real, actual countries demonstrating its efficacy.
Furthermore, no one is saying that you run deficits forever...you just have to run them at the right times and in the right ways. And, the time is now. It's unfortunate that we ran deficits during low unemployment periods to finance Wars and Unnecessary "pro-growth" marginal tax rate reductions and that we've wasted years running deficits because of people on unemployment insurance and food stamps but the time is now.
You say we're barreling toward the tipping point and in the same post imply that Germany isn't and yet they have higher debt to gdp than we do. There are limits but we're no where close to that limit. Greece has hit theirs and they should probably leave the Euro and Devalue. When Keynes was writing the UK's debt/GDP ratio was something like 130-150% of GDP.
You're worried about possible but unlikely problems like a jump in borrowing costs when the real, imminent problem is disastrously high levels of unemployment. Something has to be done about that, do you not agree? If we can get that fixed I'll be right there with you arguing for fiscal consolidation.
But I suppose I need you to say it for me more slowly and clearly so I can understand :rolleyes:
