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IMF: Austerity is much worse for the economy than we thought

Phys251

Purge evil with Justice
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IMF: Austerity is much worse for the economy than we thought


This is PRECISELY why I refuse to drink the "government is spending 'out of control'"/"we need to shrink the government" kool-aid. And oh yeah, remember that Stimulus and how bad it was supposed to be? What say you, deficit hawks?
 

If you convince a profound alcoholic to stop drinking, his withdrawal symptoms might be so bad that you'll think it was a mistake to tell him to stop drinking. Deep down, however, you recognize he's killing himself anyway.

Do you comprehend the analogy here?
 

Did you even read the article, or did you just dismiss it because you didn't like it?
 

Extremely short sighted.

How bad is the stimulus? I don't know we'll have to ask our children as they struggle to pay the interest someday. About all it has seemed to stimulate is projected future spending. The question is who will be better off in the long run. With current policies it most likely will not be us.

Just because we appear to be in better shape than Europe, for now, is hardly reason to celebrate. As I heard one person say, "we're the favorite horse in the glue factory".

In addition if you read the latter part of the article it calls into question these very results. Time will tell who comes out ahead.

Germany outperforming Greece, who'd have believed it. I wonder if Greece's performance under austerity would improve if they could get people to pay their taxes?
 

So your answer is "no, I don't comprehend the analogy."

I haven't dismissed the article at all, rather I embrace the fact that short-term-focused economic analyses will always suggest we should frown upon austerity.

I introduced the alcoholic analogy because the alcoholic would actually function better if he's liquored up than if he were going through withdrawals. But that does not mean that remaining liquored up at all times is good for him.
 
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"Austerity is much worse for the economy that we thought."

HA! Particularly if you're the one that demands freebies. Whole different viewpoint than from those who must pay to support your sorry ass.

The IMF, like the UN, always seems to be looking for that redistribution to the wealthy "leaders" of 3rd world countries. Obama likes them, though, he sees himself in that model somewhere.

Tell me again how much the IMF or the UN donated to help the flood victims in America, I forget. I guess austerity sounded pretty good there.
 
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Considering how many crazy posts we get around here, I figured yours was one of them. Guess not.

Keep in mind that counter-cyclical spending is always intended to be a temporary measure. Once the economy gets going again--which it will--ease up on the additional spending.
 

Now THIS is where I need to sincerely ask if you even read the article or not.
 

Based on what will it? Your unflinching confidence is noted, but on what is it based? What is happening in the last 20 years vis-à-vis globalization is unprecedented in all of human history, so what convinces you that there will ever be this lovely recovery to a time where we can EVER comfortably reduce spending?

Summoning the alcoholic analogy again, it sounds somewhat like you're saying "it'll be easier to quit once I've downed the rest of this case."
 
Neomalthusian said:
Summoning the alcoholic analogy again, it sounds somewhat like you're saying "it'll be easier to quit once I've downed the rest of this case."
Click to expand...

More like, "I'm going through hard times and need to work 12 hours, seven days a week. It'll be easier to quit once I can take a week off to endure the withdrawal without losing my job. Better to be functionally drunk and employed than to be homeless, jobless and sober."
 
Austerity during an economic downturn never works, history has shown that it is always counterproductive. This is the first fatal flaw in your feeble attempt to compare alcohol detox to austerity.
 
You just basically said that government spending is perpetually necessary lest we see a major GLOBAL collapse.
 
Keynesian economic theory actually covers this. In hard time you spend, when a recovery has run its course you cut back.

Neomalthusian's analogy is downright inane. This is more of a situation where you need blood transfusions to stay alive. It costs money but you keep shelling it out in order to get more blood, and you go into debt if needed. If you stop spending the money to avoid going deeper into debt you're dead, and who cares about the long term debt then?

People like Neomalthusian would choose to die. That's good for him/her, but everyone else is going to choose survival, at all costs. This is why governments keep getting overturned in Europe when they push austerity: the people are choosing survival.
 


Zalatix said:
Austerity during an economic downturn never works, history has shown that it is always counterproductive. This is the first fatal flaw in your feeble attempt to compare alcohol detox to austerity.
Click to expand...

Considering the OP article defines austerity as both spending cuts AND tax hikes:
This suggests that tax hikes and spending cuts have been doing more damage to those economies than policymakers expected.
Click to expand...
One has to wonder, if the IMF assertions are correct, why we are engaging the President/Democrats want to raise taxes...?
 
After reviewing the IMF Outlook (pg 126) casually note their conclusion for the US:


Generally within the Outlook they define 'fiscal consolidation' as tax increases and spending cuts...kinda contradicts the assertion made by the article in the OP and supports 'deficit hawks' desires...?
 
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