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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 63338  
Subject: UK: Austerity Fails, Stay the Course Date: 12/8/2012 7:52 PM
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Interesting article about the results of Britain's austerity program:

In making his annual Autumn Statement to the House of Commons on Wednesday, George Osborne, the Chancellor of the Exchequer, was forced to admit that his government has failed to meet a series of targets it set for itself back in June of 2010, when it slashed the budgets of various government departments by up to thirty per cent. Back then, Osborne said that his austerity policies would cut his country’s budget deficit to zero within four years, enable Britain to begin relieving itself of its public debt, and generate healthy economic growth. None of these things have happened.

The article goes on to point out that this was a predictable result, and in fact was predicted. By contrast, the US is reducing its deficit faster by not going the austerity route.

The tragedy is that none of this needed to happen. Britain suffered a double-dip recession and when the smoke cleared their deficit problem got worse, not better. The official reaction is to double down on a losing strategy. The silver lining is that we can use the UK as an example of what not to do.


http://www.newyorker.com/online/blogs/comment/2012/12/auster...
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46698 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/8/2012 10:52 PM
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Tea-Bag savvy Republicans won't be satisfied until we have a Hoover-sized unemployment rate of 25% or more.

intercst

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Author: salaryguru Big gold star, 5000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46699 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/9/2012 3:59 AM
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It seems that there are no tea-baggers who ever took Econ 101. The fact that there are a lot of angry, old, white men who did not take Econ 101 should not surprise us. But I have always found it disconcerting that there were so many people in European government who were ignorant of economic history.

The failure of austerity should not surprise anyone who studied history . . . actual history, not FuxNews history.

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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46700 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/9/2012 10:57 AM
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"The failure of austerity should not surprise anyone who studied history "

You mean that the failure of the Greek government to actually live within its means for the last 30 years is 'not surprising' when the whole government is in total collapse?

heh heh

The European "austeriy' is merely LIVING WITHIN the budget. Something Obama blabs about but has no intention of doing since he won't even get a budget passed, no less live within it.

Within 10 years our country will be toast. Borrowing over a trillion a year is heading us for disaster...

and if you think 'austerity' - ie, living within your means is 'horrible'...try it yourself. Max out all your cards..borrow against your house- refi it..take all the money out...get a title loan on your car......borrow even more. open every card you can..max them out....spend 150% of what you make each year and have zero savings....and see how long you last......

And if some one says 'hey, why don't you live within your means'...you'd say 'austerity always fails' and I'm going to spend EVEN MORE by borrowing even more!......


You ain't seen nothing yet. Wait until hyper inflation sets it.....


t.

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Author: FolacinTheAcidic Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46707 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/9/2012 6:54 PM
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You ain't seen nothing yet. Wait until hyper inflation sets it.....

Any reason to think that it will? See the article that this article references - http://www.slate.com/blogs/moneybox/2012/08/15/hyperinflatio.... The key quote from the Slate article:

I think this is an important list because it helps clearly highlight that 
under the list of causes of hyperinflation, you don't really have "used
aggressive monetary stimulus while in a steep recession." Instead the main
theme here is war, with hyperinflation either occuring during a major
military conflict or else in its aftermath.


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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46709 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/9/2012 7:26 PM
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You think Zimbawbe had a major 'war'?

You think ARgentina with 25% a year inflation had a 'major war'?


No...they both had out of control spending.......



t.

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46721 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/10/2012 5:54 PM
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<<The tragedy is that none of this needed to happen. Britain suffered a double-dip recession and when the smoke cleared their deficit problem got worse, not better. The official reaction is to double down on a losing strategy. The silver lining is that we can use the UK as an example of what not to do.


>>



Democrats are joining Dick Cheney in predicting that "deficits don't matter."


Back when Dick was spending the dough with this argument, liberals and Democrats ridiculed it.


Now that liberals and Democratrs think THEY will be able to do the spending, it sounds like a keen idea to them.



Seattle Pioneer

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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46731 of 63338
Subject: Re: UK: Austerity Fails, Stay the Course Date: 12/10/2012 11:46 PM
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Democrats are joining Dick Cheney in predicting that "deficits don't matter."

Back when Dick was spending the dough with this argument, liberals and Democrats ridiculed it.


Actually Dick was making the opposite argument, the same mistake that idiot George Osborne is making.

Cheney was arguing that if the economy is doing well, which was at the time relatively speaking, then deficits don't matter because you have all this money coming in. So spend away, it doesn't matter.

Osborne is saying that because the economy is weak they don't have much money so they need to be cutting back.

Both those approaches are the exact wrong thing to do.

When times are good, that's the time the government should be looking for ways reduce obligations, eliminate redundancies, maybe raise taxes to reduce debt all of that. Because when times are bad, the government can borrow money to pick up unused capacity in the economy and it is much harder to do that if there is a big structural deficit. It is called countercycling. It is on the first mid-term of Econ 101.

Unfortunately, too many politicians are more worried about being ideologically pure than making correct decisions. But as the article points out we will have some textbook examples of the exact wrong thing to do, so politicians in the future can ignore those as well.

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