Austerity Stormtroopers Forget Their Economics

Aimed at all countries and made a week before the release of dismal growth performance figures.

 

I didn't because the quote provided laid this out for the premise behind what he's saying. If the growth in the UK is slower than the US, the the entire premise starts off flawed and I wonder why we're even talking about this at all.

Entitlements can't be maintained at current levels, austerity is become less of an option and more of a necessity.

 

Its a classic case of macroeconomic policy irrationality, where appropriate discretionary policy is replaced by action dictated through political fashion

 

I don't think it's possible for that not to be the case. Politicians are beholden to voters and voters are largely irrational and easily manipulated. Also many good policies are easily demonized.

 

Obsessive use of austerity, with no reference to basic economics, isn't driven by some bounded rationality of the median voter. I don't buy your argument at all.

 

More a classic vase of complete breakdown .
"' Appropriate discretionary policy "
Appropriate to whom ? Examples ? Comparisons? alternatives? Measurement ?
( Gobbledy Gook )
" replaced by action dictated through political fashion"
Whose? Measured against what? Reported on what sort of basis? Independent? ( More Gobbledy Gook )

Note , River has yet to tell us one country that is actively promoting growth---US and EU .
So why would you want to highlight something in isolation that no State is actually pursuing ( ignoring PR bumf from Govt's to the Serfs) ?
Would you write an article on Picasso's useless Footballing talents but ignore commenting on his abilities with a pen , pencil or paint brush ?

 

Read Blanchard's quote again! That's a deliberate attempt to break through the political fashion

 

No? Voters here, particularly those on the right clamor onto any bureaucrat who make promises of reducing taxes and reforming/eliminating entitlements. Austerity is easy to put in a catch phrase, arguments against it aren't.

 

Its easy to sell austerity, but its quite wrong to suggest its driven by voter irrationality. If anything the median voter will encourage aspects of underexpenditure (such as the public good example)

 

I am not saying the USA has to begin paying off its debt right now.

I am just saying that the USA should not get into any more debt, and this includes interest payments on the debt it already has.

 

Austerity, without consideration of macroeconomic policy needs, does typically actually increase debt

 

Do you not see that there is something wrong with the idea that the economy is unable to stop taking on more debt?

 

Eliminating debt isn't a problem. It just needs to be seen as a long term objective. Austerity, by generating greater macroeconomic problems, becomes inconsistent with that aim

 

Bad policy that's easy to sell, I struggle to see how you don't see the easy correlation to make.

Precisely?

 

Far more importantly , the Governor of the Bank of England has slotted his weight of support behind the policies and overall stance of the Coalition . Good figures today , and a sound analysis with positive , if tentative , future forecasts .
River's poppycock ideas just lack support in the real world and even a State economy like ours seems hell bent itself on showing how our dear student consultant is not yet a good Future Forecaster ( Economist) .

 

You could I suppose suggest that its easy to avoid economics and sell "its the same as the household budget decision, ain't it". I wouldn't agree though. Here, for example, its about pushing a right wing agenda e.g. Monetarism has gone, Thatcherism was a disaster; so how can you manipulate the likes of NHS expenditures (and encouragement of privatisation) without upsetting the plebs?

 

Sells like hotcakes on this side of the pond, why do you think there's so much zealotry regarding the national debt? 14T adds a lot of fuel to that rhetorical fire.

No NHS here, and the right will do everything within its collective power to ensure we never do. It's the argument you outline above: "We're up to our eyes in debt, how can we possibly afford another entitlement program" and then my hackles get raised as the very next remark is "Oh yea, lets cut some taxes too"

 

We know righties don't do economics!

The issue is the notion of the 'normal' debt (i.e. what would things look like if we eliminated short term issues such as the effects of welfare policy 'fiscal stabilisers'). Clearly we should have higher taxes because of health care policy, but simply cutting expenditures are likely to lead to deadweight losses in terms of public good provision