The Wonders and Magic of Austerity

[Dioscuri]

What's austerity?

What's spending?

[Enki]

The problem with austerity Europe style is that the Bankers of those nations put their nations into penury, then in order to fix those nations they get rid of the Democratically elected governments, appoint bankers to run it, and fire sale the resources of the nation to foreign interest to pay back the debts.

When we frame this as a left or right issue, I think it misses the point. What is happening worldwide is the people who were at the center of causing the situation are being rewarded for what they have done, rewarded to such a degree that is essentially making whole nations slaves to those fortunate enough to be on the right side of the economic collapse.

[Typhoon]

The problem with austerity Europe style is that the Bankers of those nations put their nations into penury, then in order to fix those nations they get rid of the Democratically elected governments, appoint bankers to run it, and fire sale the resources of the nation to foreign interest to pay back the debts.

When we frame this as a left or right issue, I think it misses the point. What is happening worldwide is the people who were at the center of causing the situation are being rewarded for what they have done, rewarded to such a degree that is essentially making whole nations slaves to those fortunate enough to be on the right side of the economic collapse.

Yes.

[cdgt]

There comes a point where British austerity is just a coded way of trying to preoccupy a growing underclass with something. Paying them off has led to a generation or two of young Northern English and Scottish men, who have not worked a day in their lives. Taking care of them as a way to avoid sedition has been baleful to the character of these people. It's hard to expect a working ethic in someone who doesn't have the model of those behaviors necessary to maintain a job. And even then, there seems little in the way of jobs to begin with.

I don't think the US is quite in that shape; but considering how spending has led to those conditions, why repeat the same sort of errors to begin with?

Because being taken care of is a social right.

• Or so I am told.

But these people can't be abandoned either. This whole edifice will crash and it is going to be painful.

Correct on all three points, at least in principle. But when the edifice crashes, some (most?) of those people will be abandoned, not necessarily by choice.

Not making any more of them would be a swell start. Rehabilitating perhaps some to consider that their welfare should not primarily be someone else's responsibilty would be a noble goal. Noble, that is, if indeed a crash is inevitable and that such folk will suffer disproportionately when reality impedes their caretakers. Not that such a re-orientation will be viewed as noble in real-time. Sad stuff, economics is the dismal science...

[Simple Minded]

Austerity was supposed to bring "confidence" to the markets. Of course, there is no such thing as business confidence, and business planning is not linked to government budgets except when government money flows to businesses. Austerity did exactly what economists knew it would: lower demand and exacerbate the recession.

Has austerity ever worked?

Austerity is a morally loaded word, meaning that you should feel pain if you want to be a deserving citizen. Austerity is a form of flagellation. What is required is living within one's means. And if some people's means are too low to allow for satisfaction of basic needs, the community should supplement them. Austerity is a word self righteous people use to control poorer and less gifted people.

Austerity is also a word people use to control themselves (self-flagellation) in the present to ensure/build a better tomorrow. Definitions are precise, interpretations are determined by the receiver, and are often very "flexible."

As for the self-righteous of all political and ideological stripes, they are often their own worst enemies. They usualy reap what they sow........ which depending upon your perspective could be terrrible or just, or something in between...

[Endovelico]

Definition of AUSTERE (from the Merriam-Webster online dictionary)
1
a : stern and cold in appearance or manner
b : somber, grave <an austere critic>
2
: morally strict : ascetic
3
: markedly simple or unadorned <an austere office> <an austere style of writing>
4
: giving little or no scope for pleasure <austere diets>

From an economic point of view, imposing on someone this kind of austerity is sadistic. As I mentioned before, people should live within their means, but that doesn't mean being austere. Being austere would mean spending a lot less than one could, for some moral reason. Living poorly because one doesn't have any means to live better, is not austerity, is simply being poor. So, using the word austerity in respect of countries or peoples who are going through a difficult time, is totally misplaced. It would be a lot better using the words thrift and thrifty. But northern Europeans, with their ascetic protestant outlook, think that austerity - as a form of penance - is a lot more appropriate.

[Enki]

The problem with austerity Europe style is that the Bankers of those nations put their nations into penury, then in order to fix those nations they get rid of the Democratically elected governments, appoint bankers to run it, and fire sale the resources of the nation to foreign interest to pay back the debts.

When we frame this as a left or right issue, I think it misses the point. What is happening worldwide is the people who were at the center of causing the situation are being rewarded for what they have done, rewarded to such a degree that is essentially making whole nations slaves to those fortunate enough to be on the right side of the economic collapse.

Yes.

Peaceful protests will turn to slaughter eventually I believe. Bankers are going to get their heads cut off. It doesn't seem like they are giving an inch on this.

[Ibrahim]

The problem with austerity in the US is that it's always tied to firing a bunch of people or removing services from people in desperate needs, which is because it isn't about nuts-and-bolts accounting, but always about advancing some political ideology. Boring accountants can actual trim government without crippling growth.

Canada's 11-month budget deficit C$14.5 billion
OTTAWA (Reuters) - Canada's federal budget was in surplus in February, and the budget deficit for the first 11 months of the 2011-12 fiscal year was more than C$10 billion ($10.2 billion) less than the government has projected for the entire year.

The Department of Finance's monthly fiscal monitor showed a surplus of C$1.48 billion in February. That compares with a deficit of C$592 million in the same month last year. The January surplus was C$1.72 billion.

For the period from April 2011 to February the shortfall totaled C$14.5 billion, down from C$28.3 billion in the same period a year earlier.

In its March 29 budget, the Conservative government forecast a shortfall of C$24.9 billion for the year 2011-12, or 1.5 percent of gross domestic product, and a return to surplus in 2015-16.

Those estimates include a C$3 billion cushion for risk.

In February, expenditures fell 3.6 percent from a year earlier, a drop attributed mainly to lower operating expenses. Revenues increased 5.2 percent on an increase in corporate and personal income taxes

http://ca.reuters.com/article/domesticN ... AX20120427

[Mr. Perfect]

Where can you find austerity in the US I wonder?

[Zack Morris]

Nowhere. And nobody cares.

[Mr. Perfect]

Well that's what I thought. I think then we can proceed with the Paul Ryan plan without any worry of "austerity".

[monster_gardener]

The problem with austerity in the US is that it's always tied to firing a bunch of people or removing services from people in desperate needs, which is because it isn't about nuts-and-bolts accounting, but always about advancing some political ideology. Boring accountants can actual trim government without crippling growth.

Canada's 11-month budget deficit C$14.5 billion
OTTAWA (Reuters) - Canada's federal budget was in surplus in February, and the budget deficit for the first 11 months of the 2011-12 fiscal year was more than C$10 billion ($10.2 billion) less than the government has projected for the entire year.

The Department of Finance's monthly fiscal monitor showed a surplus of C$1.48 billion in February. That compares with a deficit of C$592 million in the same month last year. The January surplus was C$1.72 billion.

For the period from April 2011 to February the shortfall totaled C$14.5 billion, down from C$28.3 billion in the same period a year earlier.

In its March 29 budget, the Conservative government forecast a shortfall of C$24.9 billion for the year 2011-12, or 1.5 percent of gross domestic product, and a return to surplus in 2015-16.

Those estimates include a C$3 billion cushion for risk.

In February, expenditures fell 3.6 percent from a year earlier, a drop attributed mainly to lower operating expenses. Revenues increased 5.2 percent on an increase in corporate and personal income taxes

http://ca.reuters.com/article/domesticN ... AX20120427

Thank you Very Much for your post, Ibrahim.

Boring accountants can actual trim government without crippling growth.

This reminds me of one of Milo's posts at the Spengler Forum: Boring Civil Servants saving Canada from the Financial Mess we had/have here in Uz.

Kudos to the Canadians again.......

Sometimes caffeine free is better....

More and more it seems, actually.........

If it was warmer in Canada, I might be tempted to move there.......

Except for the fact that Canada is in the Northern Hemisphere

Which may not be a good place to be if things blow up Nuke wise in the ME.........

Likewise for Uz.........

[Simple Minded]

Nowhere. And nobody cares.

I'm not so sure. I think plenty of immigrants know the meaning of the word. And in a couple decades, many will be wealthier than many third or fourth generation Merikans.

I know people who can't save up two nickels to rub together, and I know day labors who send a couple thousand bucks back to Mexico every two or three months.

Maybe the expectation of immediate gratification factors into the equation more for some than austerity. Lots of variables, none more so than the individual person.

[Mr. Perfect]

This reminds me of one of Milo's posts at the Spengler Forum: Boring Civil Servants saving Canada from the Financial Mess we had/have here in Uz.

The thing is there is no evidence of it.

[Simple Minded]

Definition of AUSTERE (from the Merriam-Webster online dictionary)
1
a : stern and cold in appearance or manner
b : somber, grave <an austere critic>
2
: morally strict : ascetic
3
: markedly simple or unadorned <an austere office> <an austere style of writing>
4
: giving little or no scope for pleasure <austere diets>

From an economic point of view, imposing on someone this kind of austerity is sadistic. As I mentioned before, people should live within their means, but that doesn't mean being austere. Being austere would mean spending a lot less than one could, for some moral reason. Living poorly because one doesn't have any means to live better, is not austerity, is simply being poor. So, using the word austerity in respect of countries or peoples who are going through a difficult time, is totally misplaced. It would be a lot better using the words thrift and thrifty. But northern Europeans, with their ascetic protestant outlook, think that austerity - as a form of penance - is a lot more appropriate.

Endo, I really have no knowldege what you mean by "this kind of austerity."

I was thinking more in terms of individuals imposing discipline upon themselves. Obviously, in politics, everything becomes a weapon to win one for the team. You are right, it was a bad application.

Regarding the American concept of austerity/living within your means to build a better future for you and your decendents, many in the first two generations of immigrants seem to have understood it. Fewer in generation 3 and up seem to have any long term vision.

[monster_gardener]

This reminds me of one of Milo's posts at the Spengler Forum: Boring Civil Servants saving Canada from the Financial Mess we had/have here in Uz.

The thing is there is no evidence of it.

Thank you Very Much for your post, Mr. Perfect.

Will have to check the Spengler Archive.........

It's been a while..........

Feel free to refute......... Might save me the time searching.......

But that's my memory of what Milo wrote.........

Memory often not what it used to be except for things like plant names and Moon craters.......

But isn't Milo one of yoursElves?

Vaguely remember that from the Spengler Board ......................

My apologies in advance to you and Milo if I am remembering incorrectly...........

[Mr. Perfect]

Thank you Very Much for your post, Mr. Perfect.

Will have to check the Spengler Archive.........

It's been a while..........

Feel free to refute......... Might save me the time searching.......

But that's my memory of what Milo wrote.........

Memory often not what it used to be except for things like plant names and Moon craters.......

But isn't Milo one of yoursElves?

Vaguely remember that from the Spengler Board ......................

My apologies in advance to you and Milo if I am remembering incorrectly...........

I believe Milo did say that, I just disagree. I can find no evidence of Canadian regulators being aware of the Subprime market and not allowing Canadian banks to participate. There may be some I just haven't found it.

They simply seem to have been forgotten in the whole process, which is typical of the Canadian experience. Being forgotten may have pros as well as cons. You just have to decide if that is what you want I suppose.

[Ammianus]

What I find funny is that all those austeritarians were right in deriding the bullish confidence and clarity of those neo-Keynesians had in ostensibly identifying the problem and offering the standard textbook solutions. What's even funnier is that they then turn right back around and started touting Austerity as the magic bullet to solve all the problems we have, will have, and will ever have ( I remember edthe theoretical growth rates being churned out to support that thesis, woo boy). Not only that, they proclaim the Deficit as the biggest and most badass threat Western nations will ever face, that the markets too consider it so, and that if we don't act right now, lavender's gonna hit the fan ( despite the room already smelling.....)

Long story short, this whole thing reminds me of a certain Jim Carrey movie.

[Mr. Perfect]

What's austerity Ammianus?

[Ammianus]

There comes a point where British austerity is just a coded way of trying to preoccupy a growing underclass with something. Paying them off has led to a generation or two of young Northern English and Scottish men who have not worked a day in their lives. Taking care of them as a way to avoid sedition has been baleful to the character of these people. It's hard to expect a working ethic in someone who doesn't have the model of those behaviors necessary to maintain a job. And even then, there seems little in the way of jobs to begin with.

I don't think the US is quite in that shape; but considering how spending has led to those conditions, why repeat the same sort of errors to begin with?

*shrugs* The businesses, companies,and corporations could theoretically step in and offer them a way in v.s leaving those chavs continually sucking the teat of the unemployment office. But since they consider doing so to be against their very fiber of their interest and existence, they apparently decided that funding the further tethering of those unfortunates onto the state to be much cheaper for them in the long run than any other option. Which is to say, it will be business as usual for the forseeable future.

[Ammianus]

What's austerity Ammianus?

The one in Europe right now? To a certain extent, the majority of the state budgets in America as well.

But who knows, maybe according to your precise internal calculator none of these cases count. *shrugs*

[NapLajoieonSteroids]

Long story short, this whole thing reminds me of a certain Jim Carrey movie.

Batman Forever?

[Mr. Perfect]

I don't know, I'm watching governments spending as much money as they know how and it's being called "austerity". I'm wondering what kind of spending would make you happy, and what you think it would do.

Eg, it seems like you really object to GB spending and frankly if this mild recession of theirs is the worst that can happen what is the problem exactly?

[NapLajoieonSteroids]

There comes a point where British austerity is just a coded way of trying to preoccupy a growing underclass with something. Paying them off has led to a generation or two of young Northern English and Scottish men who have not worked a day in their lives. Taking care of them as a way to avoid sedition has been baleful to the character of these people. It's hard to expect a working ethic in someone who doesn't have the model of those behaviors necessary to maintain a job. And even then, there seems little in the way of jobs to begin with.

I don't think the US is quite in that shape; but considering how spending has led to those conditions, why repeat the same sort of errors to begin with?

*shrugs* The businesses, companies,and corporations could theoretically step in and offer them a way in v.s leaving those chavs continually sucking the teat of the unemployment office. But since they consider doing so to be against their very fiber of their interest and existence, they apparently decided that funding the further tethering of those unfortunates onto the state to be much cheaper for them in the long run than any other option. Which is to say, it will be business as usual for the forseeable future.

You have that right, it will be business as usual until something really breaks.

[Mr. Perfect]

*shrugs* The businesses, companies,and corporations could theoretically step in and offer them a way in v.s leaving those chavs continually sucking the teat of the unemployment office. But since they consider doing so to be against their very fiber of their interest and existence, they apparently decided that funding the further tethering of those unfortunates onto the state to be much cheaper for them in the long run than any other option. Which is to say, it will be business as usual for the forseeable future.

So are you under the impression there are no ill effects on any level of government debt?