Austerity or stimulus?

[mac]

There is a cluster of evidence that the posterity movement, in Europe, and here in opposition to Obama's stimulus, has lost its luster. The victory of anti-austerity forces in Greece, http://www.nytimes.com/2015/01/26/world/europe/greek-election-syriza.html
the growing popularity of Podemus in Spain http://www.theguardian.com/world/2015/jan/26/spain-podemos-syriza-victory-greek-elections
and the earlier decision of the European Union to pump $380 billion into the economy with infrastructure spending: http://www.hurriyetdailynews.com/eu-proposes-380-billion-investment-plan.aspx?pageID=238&nID=74848&NewsCatID=344

shows that austerity has proven, at the very least, unpopular in Europe.

In comparison, the Wall Street Journal rates the US economy as third most competitive in the world http://247wallst.com/special-report/2014/09/06/the-best-economies-in-the-world-2/4/, despite a fairly high level of debt. The US economy is rated well above Switzerland and Germany, despite their lower debt burden.

The economic history of the 20th century convinces me that only deficit spending, on a massive scale to fund World War II, ended the Great Depression. But it seems that the more modest stimulus early in the Obama administration has had the desired effect and the economy is growing, deficits are falling, and wages are increasing at last.

Is there any countervailing evidence of the benefits of austerity, either in response to the 2008 recession, or any previous ones?

[nw30]

Some comments that I would like to share, they are from this site's article~
http://www.dailymail.co.uk/news/article-2934527/Anti-austerity-anger-sweeps-Spain-hundreds-thousands-march-Madrid-support-fledgling-radical-leftist-party.html

"Far left attitude to everything, I'm entitled to what people have worked for even though I have no job and have never contributed to society."

"What do we want? Free stuff! When do we want it? Now! Who's gonna pay for it? We don't care, We just want it."

"The Spanish gubmint made lots of promises it could not keep without borrowing. Now the people want them to keep their promises and they cannot, so the communists step in and say, "We will make the gubmint keep those promises." This is European socialism at it finest. The same things are happening here." [USA]

"Socialism and left wing policies will always be doomed to failure because the reality of it is the innate selfishness of every human beings that says, if I can get away without working or getting freebies, let others work while I enjoy their labor."

from mac:
"shows that austerity has proven, at the very least, unpopular in Europe."

Well no duh, you'd be pissed also if your free candy was taken away.

Look up France's or Spain's work requirements, you'd be amazed at how spoiled those workers have become.

They better crank up the Euro presses for all the handouts.

[mac]

I asked about the benefits of austerity. No information, eh? Unemployment in Spain is at 24%, over 50% for those in the 18-25 group. It seems that the cure is worse than the disease. No comments about the recovering US economy, eh?

No solution is really a solution if it doesn't work, or engenders a backlash. I guess the Tea Party has yet to learn that.

[swchandler]

The article is one thing, but the comments offered by readers is an entirely different thing. Given the media source and who they are trying to appeal to, the comments aren't surprising. Opinions from the tin hat crowd.

[GURGLETROUSERS]

As the Irishman said, in reply to a request from somebody who was lost, to show him the way; 'Well if I were you, I wouldn't be starting from here!'

Perhaps an analysis of how Spain got itself into this state of bankruptcy and sky high unemployment in the first place? But no, doesn't fit the left's agenda. (It was more to do with being allowed to be locked into the E.U. one fits all mantra, when their economy was clearly NOT meeting the laid down requirements of entry into that system.)

The U.K., not a part of the E.U. fiscal policy straight jacket, is now, according to the I.M.F., the fastest growing economy in the Western world, BECAUSE of the so called austerity measures the right wing government have adopted.

But that doesn't fit the left wing agenda either, so no recognition of that! They'd rather believe our people are starving in the streets. (As if!)

[GURGLETROUSERS]

Correction. Meant Greece, not Spain,

Reason for the slip was that many Brits who settled in Spain when the EU single currency project seemed to be working, are now selling up their houses at a loss, and moving back here in droves, before Spain also hits the wall.

My brother is one of them, because he clearly sees reality.

[mac]

More evidence that critical thinking is in decline in this country. Nothing that I wrote suggested that a) Greece was responsible in getting into the fiscal mess they were in; or that b) the solution was "free stuff", or that c) people should get things without working. GT and NW filled in their favorite talking points rather than make an argument.

What I suggested, somewhat obliquely, was that it may be time to use investment in infrastructure to put people back to work. That was the idea of the European Union. It was once seen as a bipartisan approach to stimulating the economy in this country, and has worked pretty well. The question that I asked, that everyone ran from rather than address, is has austerity worked anywhere?

In my opinion, a big part of the difficulty is that we turned to the banks--who had helped create the problem in the first place--to guide us to fiscal responsibility. Greece was certainly an example of irresponsible government practices, promising benefits that it couldn't deliver, and ignoring widespread cheating on taxes. No responsible bank should have loaned them money!

Spain, the roots of the problem lie, as in this country, more in a massive speculative bubble in housing--supported, apparently, by the British. Again, the hubris of the banks in assuming that things would go up forever, or in marketing predatory loans, was a fundamental cause.

In such circumstances, when different interests have investment in assets that have lost substantial value--all of them need a haircut! What the austerity argument seems like to me is a way for the banks to avoid losing their fair share of hair.

To be sure, in both Spain and Greece, the severe cutbacks in public investment, without accompanying increases in private investment, led to further contraction in employment, which led to further contraction in tax revenues to repay the loans, which led to a downward spiral.

So I ask again, conservatives, where has austerity worked?

[uwindsurf]

[GURGLETROUSERS]

Bullshit youwindsurf. Absolute bullshit!

1) The so called welfare cuts which left wingers use for political purposes (the Oxfam analysis is a typical case) are NOT cuts at all. They are a SLOWING of the yearly increases in the welfare budget, which has ballooned to crippling proportions.

2) Contrary to the opinions of outside organisations such as Oxfam, we are not a a state of poverty, as the countless thousands currently camping at the French Channel ports, eschewing all other European countries and risking their lives by clinging onto, in, and under lorries bound for Britain, and our benefits Eldorado testify! Even the German leader has recognised why they do so, and called on us to make changes.)

3) Bugger the rich. That is the lefts great red herring. (Squeeze them till the pips, and we can all live in luxury.) Presumably you have no rich in your country!

4) I have a grave disadvantage over you in not being a professional Googler!

Yours in disgust.( Had enough of this nonsense.) Over and out!!

[uwindsurf]