Austerity is still not working.

So it's been years now. When does the magical free market fairy show up and reward Britain for doing that thing that everyone says will make the magic free market fairy show up?

Britain is facing an additional year of austerity after the government said Wednesday it missed one of its self-imposed debt reduction targets because the economic recovery was weaker than expected. George Osborne, the Chancellor of the exchequer, said it would take four years instead of three for Britain to start reducing its debt as a share of national income. Speaking in Parliament to give an update on the economy, Mr. Osborne said austerity measures would now stretch to 2018.

He maintained, however, that the debt reduction plan was on track, attracting some heckling and laughter from some members of Parliament.

The government had previously planned to start cutting debt as a share of gross domestic product by 2015-2016.

The Office for Budget Responsibility, a non-partisan body that is monitoring the economy, has reduced its forecast and now expects the economy to shrink 0.1 percent this year, as opposed to 0.8 percent growth.

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They cut and cut and man did the jobs and capital inflow come like crazy! Oh wait, their economy actually contracted. Well, it's been years. At least capital realizes that Britain is serious about cutting their deficit and will be returning any day now. Their projections must show that, right?

In 2013, the OBR expects a mere 1.2-per-cent growth, down from 2 per cent. In 2014, the GDP is expected to rise by 2 per cent instead of 2.7 per cent.

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1.2%, which is not particularly good. Obama has been getting roasted for sluggish growth and the US GDP went up how much LAST year? 1.8%, which is 30%+ better than England's (projected) best year since austerity measures? And US GDP is currently projecting at 1.7%-2.1% for 2012.

tl;dr list:

US GDP Growth:
2011: 1.8
2012: 1.7**
2013*: 2.5

UK GDP Growth:
2011: 0.8
2012: -0.1
2013*: 1.2

*projected
**lowest projection, highest is 2.1

They cut government to cut debt. Income goes down. Debt goes up. So they cut government to cut debt. Income goes down. Debt goes up. When does the free market fairy get here again? Why isn't it working? And after all this, they STILL HAVE MORE DEBT THAN WHEN THEY STARTED.

Anyone?

And the IMF just released a study that attempts to answer this exact question. Spoiler alert: raising taxes barely moves the growth needle. Government cuts massively damage the economy.

A new study (pdf) by the International Monetary Fund raises a further warning flag for fiscal cliff negotiators in the U.S. In what it bills as the first-ever study of its kind, the fund analyzed decades of data on the world's major industrialized countries to estimate how changes in government spending or revenue affect economic output.

The news isn't good. Given current circumstances, with a U.S. economy that is growing but still trying to make up lost ground from the 2008 crisis, a one dollar change in government spending could knock as much as $1.80 in output from the economy what fund researchers called a "statistically significant and sizeable" outcome.

One brighter spot that could also influence negotiators: the growth impact of a tax hike is estimated to be negligible. The list of measures that automatically become law absent an agreement include both spending reductions and tax increases. While the spending cuts would comprise a heavy drag on growth, the fund paper suggests that a one percent rise in tax revenue would knock just 0.1 percent from gross domestic product.

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So yea.

Clearly they just didn't cut taxes enough.

"lolz."

I'm reminded of how the 2008/2009 stimulus did not work and we were told it was because the government didn't spend enough.

[quote name='UncleBob']"lolz."

I'm reminded of how the 2008/2009 stimulus did not work and we were told it was because the government didn't spend enough.[/QUOTE]
In this example we have a very nice comparison. One went stimulus and one went austerity. One is experiencing negative GDP growth and one is having ~2% growth a year.

What about the data bears out that the stimulus didn't work?

Or, in picture form. Can you spot the stimulus?

I dunno... can you?

Isn't it funny how the IMF tells everyone to increase taxes and cut spending? Then they tell the US, don't raise taxes and don't cut spending.

The reason for this difference is missing here. The US is much more important to the economy than England or Greece. If the US goes into recession, everyone does. If the US starts growing aggressively then all the rest of the world gets a shot in the arm and all these little guys that cut spending and raised taxes will have a recovery despite cuts.

If the US does austerity then the IMF's austerity strategy will be an obvious failure. They're completely banking on the US saving the world.

Hmmm. I couldn't help but notice your chart doesn't include this year at all. That's interesting that you chose that. Why would you leave off this past year? Does it materially help or hurt that argument that you left off this past year? I'm just curious cause I don't know.

Also, wouldn't it benefit us to compare to someone that used austerity, since that's actually the argument I'm making? What has the UK unemployment rate looked like the past 4 years? How about Greece? Or Spain? Cherry pick any austerity country you'd like so you can tilt the table as best you can. The result will be the same. Are they moving lower aggressively?
[quote name='Blaster man']Isn't it funny how the IMF tells everyone to increase taxes and cut spending? Then they tell the US, don't raise taxes and don't cut spending.

The reason for this difference is missing here. The US is much more important to the economy than England or Greece. If the US goes into recession, everyone does. If the US starts growing aggressively then all the rest of the world gets a shot in the arm and all these little guys that cut spending and raised taxes will have a recovery despite cuts.

If the US does austerity then the IMF's austerity strategy will be an obvious failure. They're completely banking on the US saving the world.[/QUOTE]
The IMF paper that I quote in the 2nd post specifically says that the lessons of the papers were learned in Greece and that the way they're doing it is a mistake.

edit: Just to add, that's really the gist of what I'm saying here. UncleBob immediately pivots to something he does want to talk about (OMG A PROJECTION WAS WRONG) because the underlying facts are basically undeniable at this point. Their entire economic position is that if you slash and burn the economy to get back in balance as soon as possible, the free market fairy will return with jobs and economic growth. We know without question that's just flatly not true. And when confronted, they change the subject.

Please Bob, tell us more about something tangentially related to what I'm saying.

[quote name='speedracer']Hmmm. I couldn't help but notice your chart doesn't include this year at all. That's interesting that you chose that. Why would you leave off this past year? Does it materially help or hurt that argument that you left off this past year? I'm just curious cause I don't know. [/quote]

Because that was the quickest reference I could find from a "reliable" source.

I could have posted this one, which goes through June, 2012... but the "Heritage" logo would have likely negated everything about the chart.

Also, wouldn't it benefit us to compare to someone that used austerity, since that's actually the argument I'm making?

Click to expand...

Oh? Because your chart doesn't look at anything aside from the GDP of the US.

A quick search before work brings this from The Guardian:

Huh. Why is the austere one moving up?!? And how could the fiscally irresponsible one be moving down? How is that possible Bob?

Also, dude. Use google public data. It's easy and you can even pick and choose sources. Like this one.

Unemployment:
https://www.google.com/publicdata/e...ry:GB:US&ifdim=world&hl=en_US&dl=en&ind=false

Gross National Income:
https://www.google.com/publicdata/e...USA:GBR&ifdim=region&hl=en_US&dl=en&ind=false

Adjusted Net National Income:
https://www.google.com/publicdata/e...USA:GBR&ifdim=region&hl=en_US&dl=en&ind=false

Government net debt (% GDP)
https://www.google.com/publicdata/e...ry:GB:US&ifdim=world&hl=en_US&dl=en&ind=false

Let's get Spain the mix (Greece would almost be cheating at this point wouldn't it?)
https://www.google.com/publicdata/e...GB:US:ES&ifdim=world&hl=en_US&dl=en&ind=false

Those last two are crazy huh! It sort of exactly says that austerity is not working.

There's a story here Bob. What's the story you see? I see the exact same outcome in terms of debt. And yet the way they get there is polar opposites. One bleeds the patient to lose weight. The other grows taller. One inflicts maximum pain. The other maximizes the potiential of its economy. That's what I see.

[quote name='UncleBob']A quick search before work brings this from The Guardian:
[/QUOTE]

[quote name='speedracer']Huh. Why is the austere one moving up?!? And how could the fiscally irresponsible one be moving down? How is that possible Bob?[/QUOTE]

Okay, I want to make sure I'm seeing what you're seeing.

In 2008 (right around the time we started singing Hymns to the Stimulus Gods), the unemployment in the US shot up before that in the UK, went higher than the UK (nearly 1.5% at the peak there) and reached record highs (in your provided graph, that is).

But because the UK is projected to finally have higher unemployment than the US (which, looking at the majority of the graph that, again, you provided, would be pretty in-line with historical, pre-global crisis trends), this all proves that what the UK has been doing is worse off than what the US has done.

Right?

[quote name='UncleBob']Okay, I want to make sure I'm seeing what you're seeing.

In 2008 (right around the time we started singing Hymns to the Stimulus Gods), the unemployment in the US shot up before that in the UK, went higher than the UK (nearly 1.5% at the peak there) and reached record highs (in your provided graph, that is).

But because the UK is projected to finally have higher unemployment than the US (which, looking at the majority of the graph that, again, you provided, would be pretty in-line with historical, pre-global crisis trends), this all proves that what the UK has been doing is worse off than what the US has done.

Right?[/QUOTE]
The bill was passed in Feb. 2009. It was set to phase projects of various size in and out. All the money wasn't dropped via helicopter on the day the bill was passed. Meanwhile at roughly the same time, Britain chooses a policy of austerity.

Going forward and understanding that there will be outlying events because we live in the real world and the entire galaxy of economics is not contained in austerity vs. stimulus, we can see trend lines begin to emerge on a year over year basis. You and I, also understanding that the galaxy of economics is not wholly a subset of unemployment, begin to look for other indicators that may bear out trends that indicate the progress or health of an economy. Government net debt as a % of GDP is probably a good idea. Gross national income growth is probably another. Adjusted net national income another good idea. We use these instead of less indicative or predictive stats (like say, manufacturing, or trade growth as a % of GDP) because our economies while similar, are not exactly the same and one may manufacture a shit ton while the other does very little in that area.

Using your chart, we obviously peaked around Oct. 2009. Setting aside outlier events, we are clearly on a trending pattern. Britain is also trending in a new direction after a trend of generally flat unemployment. We can say that, using only your chart, America is moving in the right direction starting 6 months after the stimulus. We can also say that Britain was flat and is now trending in the wrong direction. These are just facts. Nothing to debate at this point while we sit here sipping our brandy in our fancy snifters.

And when we look at the other indicative data sets, we see the same exact story. Very little variation. America, trending upwards. Britain, trending downwards. Trends of trends. All in concert, going the same directions.

You believe in austerity. You believe it will help the country. Hey! You ain't crazy baby! Who wouldn't think that lowering our debt via government cuts is a good thing?

But you also see the data. It is obvious. Their debt relative to ours IS NOT SHRINKING. Spain, currently full steam ahead with austerity, will not have less debt than us relative to the size of our economies. So Britain itself as a comparison is not an outlier. We can rule that out too.

Why is this happening?

Because, as you hinted at, changes don't happen overnight. The full effects of both the US Stimulus and the Austerity measures taking place overseas won't be known for years to come - and even then, as you pointed out, we'll be hard pressed to know what was due to the stimulus and what was due to other things that effected the economy. Similar to how the Obama administrations' chart has both the with and without Stimulus lines meeting at about the same place at about the same time - meaning that even the Obama administration was saying that the end result of the stimulus would be the same (just with a whole lot of money added to the debt).

Back to the original point that started this, Myke was mocking the idea of those saying that they didn't cut spending enough and that's why the austerity measures weren't working. Thus, I reflected back with the mocking of those who said the stimulus didn't work because we didn't spend enough.

Bob, if the market created the current lack of demand, why would you rely on the market to create demand currently? I'm not saying a growth economic model is ideal (I am against this notion), but in order to "fix" the economy, someone needs to spend money. Cutting taxes and government spending will not only decrease demand, it will make things more difficult for the people who are shouldering most of the burden of the recession. If the lower and middle classes stop spending, things are going to get a lot worse (as they are the actual "job creators").

It's just basic common sense. The main economic consequence of recessions/depressions is reduced spending. Companies are spending less by laying people off, consumers are spending less as they have less money etc.

You don't get out of that situation by the government also slashing spending. The government is the one body that has the power to invest money to grow jobs and get spending back up.

We got out of the great depression, and prospered through the 40s and especially 50s because of government spending. WWII, the New Deal, investment in infrastructure like the Hoover Dam, the interstate system etc. stimulated spending, created thousands of jobs and improved the US as a place to live.

And this was done without running a huge deficit as tax rate were high enough to fund it with top rates as high as 90% during parts of that era.

Now tax rates are much lower, there's a movement against government spending and recessions are going to drag on longer and our infrastructure is going to continue to crumble and lag behind much of the rest of the first world. If you want nice things, all the way from a nice economy to a world class infrastructure system, you have to pay for them.

[quote name='dmaul1114']It's just basic common sense. The main economic consequence of recessions/depressions is reduced spending. Companies are spending less by laying people off, consumers are spending less as they have less money etc.

You don't get out of that situation by the government also slashing spending. The government is the one body that has the power to invest money to grow jobs and get spending back up.

We got out of the great depression, and prospered through the 40s and especially 50s because of government spending. WWII, the New Deal, investment in infrastructure like the Hoover Dam, the interstate system etc. stimulated spending, created thousands of jobs and improved the US as a place to live.

And this was done without running a huge deficit as tax rate were high enough to fund it with top rates as high as 90% during parts of that era.

Now tax rates are much lower, there's a movement against government spending and recessions are going to drag on longer and our infrastructure is going to continue to crumble and lag behind much of the rest of the first world. If you want nice things, all the way from a nice economy to a world class infrastructure system, you have to pay for them.[/QUOTE]

Very nice summary - I didn't think it could be boiled down to a few paragraphs but you did it.

Anyone have the numbers handy showing what Federal Government spending was as a percent of GDP during these golden years of prosperity?

[quote name='dmaul1114']It's just basic common sense. The main economic consequence of recessions/depressions is reduced spending. Companies are spending less by laying people off, consumers are spending less as they have less money etc.

You don't get out of that situation by the government also slashing spending. The government is the one body that has the power to invest money to grow jobs and get spending back up.

We got out of the great depression, and prospered through the 40s and especially 50s because of government spending. WWII, the New Deal, investment in infrastructure like the Hoover Dam, the interstate system etc. stimulated spending, created thousands of jobs and improved the US as a place to live.

And this was done without running a huge deficit as tax rate were high enough to fund it with top rates as high as 90% during parts of that era.

Now tax rates are much lower, there's a movement against government spending and recessions are going to drag on longer and our infrastructure is going to continue to crumble and lag behind much of the rest of the first world. If you want nice things, all the way from a nice economy to a world class infrastructure system, you have to pay for them.[/QUOTE]And that's what pisses me off when people complain about the condition of roads one second, and higher taxes/government spending the next. Hey genius, roads don't pave themselves, and people don't work for free. We could ahve nicer roads, but people don't want to pay for them.

And that's what pisses me off when people complain about people who complain about the conditions of the roads, as if the $3 Trillion in government spending can never, ever be spent on fixing up existing roads and must, instead, be spent on special pet projects. If you want to fix the roads, we'll need another trillion dollars please.

People who are for austerity don't care if it works, I think most who aren't just plain delusional know it doesn't.

They want it because they consider it a means to an end for other purposes.

[quote name='Msut77']People who are for austerity don't care if it works, I think most who aren't just plain delusional know it doesn't.

They want it because they consider it a means to an end for other purposes.[/QUOTE]

There are two camps of fiscal conservatives, the ignorant and the puppet masters. Sadly we never get to talk to any puppet masters in these forums.

[quote name='UncleBob']Because, as you hinted at, changes don't happen overnight. The full effects of both the US Stimulus and the Austerity measures taking place overseas won't be known for years to come - and even then, as you pointed out, we'll be hard pressed to know what was due to the stimulus and what was due to other things that effected the economy. Similar to how the Obama administrations' chart has both the with and without Stimulus lines meeting at about the same place at about the same time - meaning that even the Obama administration was saying that the end result of the stimulus would be the same (just with a whole lot of money added to the debt).

Back to the original point that started this, Myke was mocking the idea of those saying that they didn't cut spending enough and that's why the austerity measures weren't working. Thus, I reflected back with the mocking of those who said the stimulus didn't work because we didn't spend enough.[/QUOTE]

And what happens to the economy when changes do happen overnight? As in the 'fiscal cliff'?

And yet, it won't. The effects of the "fiscal cliff", if it were to come to pass, even in the haphazard way they threw it together for the "deadline", it wouldn't change everything overnight.

[quote name='camoor']There are two camps of fiscal conservatives, the ignorant and the puppet masters. Sadly we never get to talk to any puppet masters in these forums.[/QUOTE]

We have discussed "They Live" here on several occasions.

[quote name='UncleBob']Back to the original point that started this, Myke was mocking the idea of those saying that they didn't cut spending enough and that's why the austerity measures weren't working.[/QUOTE]

Is *that* something I said, now? I'd be delighted if you could show me where I ever said that.

He's referring to post 3 I guess.

Just a dumbass equivalent he's trying to make between not cutting enough vs. not spending enough.

You can never get out of a recession by cutting spending. Recessions/depressions are caused by drops in spending. Any further spending cuts (public or private) can do nothing but make things worse, with larger cuts doing more harm as it just further depresses spending, cash flow and the job market.

Stimulus on the other hand can turn things around, but in a major recession it takes a large amount. It looks like the stimuli from the end of Bush's term and start of Obama's did turn things around as the job rates etc. started to shift early in his first term and have steadily improved throughout.

Not a stretch to see that a bigger stimulus would have quickened the recovery. Though it is a fair debate to have as to whether that would be worth the extra debt hit long-term. That's something only time would have told.

In any case, austerity is touted by ideologues for political reasons. Stimulus is touted by Krugman (who has a nobel prize) and other economists based on data and science. You know who we back, and who anti-intellectual retail lackeys will side with. So pointless debate like pretty much everything on this useless forum.

Obama has a Nobel Peace Prize and he's responsible weekly, unprovoked military attacks on sovereign nations.

Tell me again about your Nobel Prize winning wankwads...

LOL Bob that was such a weak response Dmaul killed you with that last bit :lol:

Yes, yes - the individual who's job is all about his ability to get free taxpayer money handed out from the government likes to defend government handouts. We all know that.

[quote name='UncleBob']And yet, it won't. The effects of the "fiscal cliff", if it were to come to pass, even in the haphazard way they threw it together for the "deadline", it wouldn't change everything overnight.[/QUOTE]

I never said it would change everything overnight.

[quote name='UncleBob']Yes, yes - the individual who's job is all about his ability to get free taxpayer money handed out from the government likes to defend government handouts. We all know that.[/QUOTE]

Decided to go ad hominem there after getting destroyed, didya Rambo? :lol:

Hey, he's the one who thought "Oh, what fun it'll be to bring up someone's personal life in the discussion." He pulls that all the time.

[quote name='UncleBob']Yes, yes - the individual who's job is all about his ability to get free taxpayer money handed out from the government likes to defend government handouts. We all know that.[/QUOTE]

What does dmaul do again? Never saw a post where he outlined that.

Just like the guy who's job is all about his employer's ability to get cheap crap from overseas and keep wages down likes to defend his employer's ability to do so.

this is why bobby hill here will never defend unions or stand up for fair wages overseas, his job depends on it.

[quote name='IRHari']What does dmaul do again? Never saw a post where he outlined that.[/QUOTE]

I have many times.

College professor at a research university.

[quote name='Clak']
this is why bobby hill here will never defend unions or stand up for fair wages overseas, his job depends on it.[/QUOTE]
An employer must pay minimum wage, but after accounting for union dues, some jobs only pay minimum wage and sometimes pay less than minimum wage. When I was 18 I worked a summer job that required joining a union. Though the company paid slightly higher than minimum wage, the union dues took a small chunk of that. This for a part-time job that I was only planning to hold for a year.

In California a proposition to weaken unions failed at the ballot box, however, the only two people I know that are in unions voted for it. One works for a theme park and the other works for a grocery store chain. Note that at this particular theme park the already pay above minimum wage to attract more qualified individuals and offer regular pay raises.

I know Meijer's also does this, and in the low season where hours aren't as plentiful, unions dues can be as much as 8% of pay. It reduces the incentive for part-time workers to hold onto their jobs and contributes to teen unemployment in my opinion. It's an interesting situation where the union has butt into a profession in which the employees are largely young, inexperienced and not seeking long-term employment. I'm talking summer jobs, holiday jobs, etc. They may question the dues taken out of their paycheck but they won't really work to change it because, hey, this job is just to earn a little extra money during college.

[quote name='dmaul1114']I have many times.

College professor at a research university.[/QUOTE]

And UB characterized your job in that disdainful way because...?

[quote name='IRHari']And UB characterized your job in that disdainful way because...?[/QUOTE]

He's an anti-intellectual and doesn't like my ilk getting federal dollars in research grants I guess.

[quote name='IRHari']And UB characterized your job in that disdainful way because...?[/QUOTE]

[quote name='UncleBob']Yes, yes - the individual who's job is all about his ability to get free taxpayer money handed out from the government likes to defend government handouts. We all know that.[/QUOTE]

It's cute that;
- You used the wrong form of whose while criticizing an academic. :lol:
- You still use handout as if that carries some kind of stigma with it. :lol:
-Despite this, you're still going to tout yourself as some flavor of "moderate" or "fiscally responsible citizen" and not the Republican schill you are.

I have never claimed to be a moderate. Ever.

But please, do go on.

[quote name='RealDeals'][/QUOTE]

That image is awesome. It reminds of this:

http://www.hulu.com/watch/143249

[quote name='UncleBob']Because, as you hinted at, changes don't happen overnight. The full effects of both the US Stimulus and the Austerity measures taking place overseas won't be known for years to come - and even then, as you pointed out, we'll be hard pressed to know what was due to the stimulus and what was due to other things that effected the economy. Similar to how the Obama administrations' chart has both the with and without Stimulus lines meeting at about the same place at about the same time - meaning that even the Obama administration was saying that the end result of the stimulus would be the same (just with a whole lot of money added to the debt).[/QUOTE]
I don't disagree. The problem is that we must make decisions about how to best handle this situation. In a perfect world, we would have two identical American states and one would go austere and one would go stimulus and we'd know and forever put the notion to bed.

Instead we have two choices: a "gut" feeling about how this should go, and a decision science based data driven decision making process. The data we have at hand paints as clear a picture as we could possibly hope for. I'd like to think that if the data showed that austerity was clearly the superior engine for growth and economic viability, I would change my viewpoint and support austerity measures.

But it doesn't. The data supports stimulus. And it's not close.

I had to take a marketing class to graduate. I loathe marketing students because they're idiots. It was me and another decision science guy (a supply chain management dude), and 30 marketing majors in the class. Early on in the semester the professor asks a question: you have a gut feeling that a marketing proposal will do incredibly well but the existing data shows that it won't. By a show of hands, who continues with the marketing program anyway? Every hand went up except me and the other decision science dude. The prof asked me why I wouldn't. I said pushing against all available data was the worst possible decision a person could make. The whole point of data is to inform the best possible decision. He told the class that I was exactly right.

The free market austerity fairy is not real no matter what our gut says, Bob.

supply chain management is a science now?

I feel the same way about sales people you feel about marketing BTW.

Back on topic, there is decades of data since the first attempts at leveling out the business cycles.

When we are up against historically low interest rates there isn't anything resembling data to make a case for austerity. In the medium and long term austerity costs money. Because in Eco 101 you learn "cost" is more than just money out of pocket. Opportunity costs and all that, letting your house burn down because it is expensive to put it out.

[quote name='speedracer']I don't disagree. The problem is that we must make decisions about how to best handle this situation. In a perfect world, we would have two identical American states and one would go austere and one would go stimulus and we'd know and forever put the notion to bed.

Instead we have two choices: a "gut" feeling about how this should go, and a decision science based data driven decision making process. The data we have at hand paints as clear a picture as we could possibly hope for. I'd like to think that if the data showed that austerity was clearly the superior engine for growth and economic viability, I would change my viewpoint and support austerity measures.

But it doesn't. The data supports stimulus. And it's not close.[/QUOTE]

I think the main difference in why I support cutting spending and you do not (at least, not to the extent that I do) is that we have completely different ideas of what we believe the government should be doing.

To break it down to the most basic level, I don't believe the government should make laws and spend money based on what's best for the economy (or, basically, what would financially benefit one group of people over another). It's that simple - and has little to do with lowering debt (which *would* happen if we passed reform that would require us to spend less than we take in) and more to do with the role of government in our lives.

When we have the government trying to influence the economy, we end up with situations where they're propping up banks and automotive manufactures, giving fat tax cuts to GE, loaning out money to corporate buddies at Solyndra, signing no-bid contracts with former employers like Haliburton, etc.

Once you open up the idea of "Well, the government has to make it better because it's bad.", where do you stop? Why not let the government take over every aspect of everything in business, commerce and every other part of the economy?

[quote name='UncleBob']I think the main difference in why I support cutting spending and you do not (at least, not to the extent that I do) is that we have completely different ideas of what we believe the government should be doing.

To break it down to the most basic level, I don't believe the government should make laws and spend money based on what's best for the economy (or, basically, what would financially benefit one group of people over another). It's that simple - and has little to do with lowering debt (which *would* happen if we passed reform that would require us to spend less than we take in) and more to do with the role of government in our lives.

When we have the government trying to influence the economy, we end up with situations where they're propping up banks and automotive manufactures, giving fat tax cuts to GE, loaning out money to corporate buddies at Solyndra, signing no-bid contracts with former employers like Haliburton, etc.

Once you open up the idea of "Well, the government has to make it better because it's bad.", where do you stop? Why not let the government take over every aspect of everything in business, commerce and every other part of the economy?[/QUOTE]

Two things. Why is it that, for a second there, I could semi-relate to some of your concerns, and then you just went the usual conservative route of, "WHERE DOES IT STOP PEOPLE!?!?!?" :lol: I could easily counter back to you of the 1800s and countless other cases of where the government doesn't intervene in limited and absolutely necessary cases (like getting out of a recession and possible preventing another), and the very freedoms you cherish and don't want the government to impose on are threatened, except by corporations. I could do that, but that would accomplish nothing. The point is, and what speedracer's central argument was, is that beyond political ideologies, he supports stimulus because it has the data to back it up. He doesn't endorse it (nor do I) just because it fits his political ideology, but because he know its the best shot to improve the economy. As he said, if austerity had a proven track record and basic economic tenets to back it up, I'd support it, but it doesn't, and I don't.

[quote name='RealDeals']He doesn't endorse it (nor do I) just because it fits his political ideology, but because he know its the best shot to improve the economy.[/QUOTE]

Is it not his/your political ideology that it is the place of the government to try to improve the economy?

Thus, you support a stimulus model?

Otherwise, I don't see how you can support a stimulus plan. "I don't think the government should be spending money to spur the economy, but I think they should do it anyway because the economy is bad." doesn't make much sense.

[quote name='Msut77']supply chain management is a science now?[/quote]
The business college lumped all the math/programming/ops nerds into "Decision and Information Sciences". I actually liked it because it sequestered the students interested in more than conjuring bullshit out of thin air. It was us (MIS), the SCM nerds, and the statisticians. The accountants were ok too. My finance and marketing classes were my own personal hell.

Back on topic, there is decades of data since the first attempts at leveling out the business cycles.

When we are up against historically low interest rates there isn't anything resembling data to make a case for austerity. In the medium and long term austerity costs money. Because in Eco 101 you learn "cost" is more than just money out of pocket. Opportunity costs and all that, letting your house burn down because it is expensive to put it out.

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[quote name='UncleBob']I think the main difference in why I support cutting spending and you do not (at least, not to the extent that I do) is that we have completely different ideas of what we believe the government should be doing.

To break it down to the most basic level, I don't believe the government should make laws and spend money based on what's best for the economy (or, basically, what would financially benefit one group of people over another). It's that simple - and has little to do with lowering debt (which *would* happen if we passed reform that would require us to spend less than we take in) and more to do with the role of government in our lives.

When we have the government trying to influence the economy, we end up with situations where they're propping up banks and automotive manufactures, giving fat tax cuts to GE, loaning out money to corporate buddies at Solyndra, signing no-bid contracts with former employers like Haliburton, etc.

Once you open up the idea of "Well, the government has to make it better because it's bad.", where do you stop? Why not let the government take over every aspect of everything in business, commerce and every other part of the economy?[/QUOTE]
I think this is the root of the disagreement. Msut argues that the business cycle cannot be left to its own devices. You argue that all interference is bad interference. I guess Msut and I just don't believe that the free market fairy will make everything better if only we give the keys to the kingdom to people with zero interest in the interests of all of us. The only people I trust less than the people I vote for are the people I don't.