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Osborne's austerity hasn't worked, so he proposes more austerity. Watch

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    (Original post by L i b)
    The problem with this logic, despite it being rather woolly (something having "no basis in economics" is a strange assertion; it's rather like saying something has "no basis in politics" - we are not dealing in simplistic facts here) is that is caricatures your opponents arguments.

    Firstly, very few politicians would ever describe their policies as "austerity". I sincerely doubt George Osborne ever has at any point. Indeed, his policies have involved, at various times, greater or lesser degrees of fiscal restraint. Both have had quite different outcomes, despite all of them attempting to reduce spending as a way of reducing the deficit.

    By saying something as been "empirically demonstrated" in economics is also pretty questionable stuff. You can cite examples, but in any one of them there are numerous other factors and considerations. The same circumstances cannot be reproduced, you cannot factor in a control group and you certainly can't remove other factors that might tend towards a different outcome.
    When economic theory and practice demonstrates something to be the case, we're on pretty solid ground, I'm afraid. There are plenty of good economic reasons why austerity would be bad for the economy, and when the things that economics predicts will happen do happen, are we supposed to act surprised?

    I don't care what Osborne calls his policies, the fact still remains that he needs to finish reading Economics for Dummies.

    (Original post by L i b)
    I'm not sure if this morally self-righteous certainty of Krugmanites and others is a new thing, or something that has come along with with every economic fad of modern times. Either way, be in no doubt that it is a position as ideological as the ones you oppose.
    I'm not certain, but George Osborne seems to be. My arguments here are entirely subject to change, but if I'm making arguments, I'll tend to make them forcefully. Calling people morally self-righteous isn't an argument, but if you think that those who support austerity are on the right side of this from a moral perspective, you evidently don't understand the concept of morality.

    (Original post by L i b)
    Has it? Despite this austerity you rail against, the UK has been the fastest growing major advanced economy for several years.
    And, if you look at the figures, Osborne postponed his austerity agenda in 2012 to get the growth he needed in time for the election. By "several" I presume you mean around two, and I'm afraid it doesn't make up for the fact that countries which pursued little or no austerity reached their pre-recession GDP, and GDP per capita, levels way before we did, and it doesn't make up for the longest fall in living standards since records began.
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    (Original post by viddy9)
    When economic theory and practice demonstrates something to be the case, we're on pretty solid ground, I'm afraid.

    I'm not certain, but George Osborne seems to be. Calling people morally self-righteous isn't an argument, but if you think that those who support austerity are on the right side of this from a moral perspective, you evidently don't understand the concept of morality.
    I think the problem here is that you're trying to give your subjective moral and political views some sort of objective gilding. Everyone from the far left to the extreme right, and plenty in the middle, have tried to do just that - which I think tells you a little bit about how successful it is.

    My point about practical demonstration is that, despite what you said, the evidence you might bring forth is not empirical in any sense: there are far too many holes in it, far too many competing causes.

    And, if you look at the figures, Osborne postponed his austerity agenda in 2012 to get the growth he needed in time for the election. By "several" I presume you mean around two, and I'm afraid it doesn't make up for the fact that countries which pursued little or no austerity reached their pre-recession GDP, and GDP per capita, levels way before we did, and it doesn't make up for the longest fall in living standards since records began.
    That would seem a peculiar stance, would it not - you're essentially saying that George Osborne knew spending more would boost economic growth and that he knew doing so would be electorally popular. Yet for some reason, you think he only decided to do it in 2012 to boost growth in time for an election. It doesn't really add up.

    Again though, I assume you still assert that we have had what you call austerity since 2012? If so, doesn't that very growth - growth that has been very impressive by the standard of large developed economies like our own - rather undermine your argument? If all austerity is bad, how come this slightly reduced austerity seem to be delivering the very results that you say austerity specifically prevents?

    As I've said, it's a poor caricature of a wide range of economic policies. "Austerity" is a fashionable catchphrase, but in reality while levels of public spending have effect on economic growth, it is on a sliding scale - and offset by a whole range of other factors (taxation, promoting FDI, the existing industries within an economy, targeted subsidies, whatever).

    In your last post you seemed to question why applying household economics to the economics of a sovereign state was so pervasive an argument. I don't necessarily think it is. I think the main problem with the left-wing economic argument is that it fails the too-good-to-be-true test: you're essentially saying public spending is great, let's do more of it and, miraculously, this problem will fix itself. Merits of each case aside, people are more likely to swallow that sorting something of this nature is going to take some degree of pain and restraint.
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    (Original post by L i b)
    I think the problem here is that you're trying to give your subjective moral and political views some sort of objective gilding. Everyone from the far left to the extreme right, and plenty in the middle, have tried to do just that - which I think tells you a little bit about how successful it is.

    My point about practical demonstration is that, despite what you said, the evidence you might bring forth is not empirical in any sense: there are far too many holes in it, far too many competing causes.
    When we have a correlation between growth and austerity which backs up what basic economic theory would predict, it does have objective gilding. Someone is right on this issue, and the evidence suggests that those who are against austerity on this basis are likely to be correct.

    (Original post by L i b)
    That would seem a peculiar stance, would it not - you're essentially saying that George Osborne knew spending more would boost economic growth and that he knew doing so would be electorally popular. Yet for some reason, you think he only decided to do it in 2012 to boost growth in time for an election. It doesn't really add up.
    George Osborne said that he would eliminate the deficit by 2015. He didn't. Why? Because he postponed austerity in 2012. Why would he do that, may I ask, and therefore fail to meet his own self-imposed target?

    George Osborne and the Conservatives want to shrink the state, which is why they're implementing austerity. That doesn't mean that they're stupid enough to lose an election for it.

    (Original post by L i b)
    Again though, I assume you still assert that we have had what you call austerity since 2012? If so, doesn't that very growth - growth that has been very impressive by the standard of large developed economies like our own - rather undermine your argument? If all austerity is bad, how come this slightly reduced austerity seem to be delivering the very results that you say austerity specifically prevents?
    It wasn't "slightly reduced austerity", first of all, and you're correct that it's a sliding scale. In my initial post, I stated that we haven't had it as bad as some people. That doesn't mean that we should be pursuing austerity, though: it means that any austerity measures that are implemented still represent an opportunity cost, because economically sensible strategies, such as investing-to-grow, would allow us to do even better.

    (Original post by L i b)
    In your last post you seemed to question why applying household economics to the economics of a sovereign state was so pervasive an argument. I don't necessarily think it is. I think the main problem with the left-wing economic argument is that it fails the too-good-to-be-true test: you're essentially saying public spending is great, let's do more of it and, miraculously, this problem will fix itself. Merits of each case aside, people are more likely to swallow that sorting something of this nature is going to take some degree of pain and restraint.
    The equivalence between the national budget and the household budget has caught on very well, in my view. I could just be unfortunate enough to be running into a lot of people who make that exact analogy, but even what you've said is suggestive of this. You state "people are more likely to swallow that sorting something of this nature is going to take some degree of pain and restraint".

    That's true, if people think this "something" is the "country going bankrupt" as you'll hear many cry, as opposed to a global financial crisis caused by the negligence and stupidity of the banks and other financial institutions.
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    I think they should have done more austerity already and got rid of things like the foreign aid budget whilst also borrowing more for infrastructure investment.

    You can do both


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    (Original post by L i b)
    This seems to be going back to the "if you're not making something with your hands, it's not real work" mentality. In terms of shuffling money, we are the global capital for financial services, yes - I don't think that's a bad thing.
    Has anybody here ever read In Praise of Hard Industries by Eamonn Fingleton?. It clearly sets out why manufacturing and not the 'new economy' is the key to future prosperity.

    http://www.fingleton.net/inpraiseofhard-industries/

    http://www.amazon.com/Praise-Hard-In.../dp/0395899680

    I love the way he states that finance is not a goose that lays golden eggs but a different feathered vertebrate entirely: a cuckoo in the economy's nest.

    The reality is that the City creates virtually no real wealth but instead acts a parasite on those who do create real wealth.
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    Auesterity causes the destruction of the working class, which causes economic contraction, this combined unabated immigration and banks printing funny money is a textbook way to collapse a countrys economy.
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    Everything renders down to whether the economy is regarded as the plaything of the speculator or the servant of the people.

    If econometrics are used only to measure variables of interest to the speculator class with plenty of money to 'gamble' then it will overlook and ignore the effects of the economy on the lives of the common folk.
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    (Original post by viddy9)
    When we have a correlation between growth and austerity which backs up what basic economic theory would predict, it does have objective gilding. Someone is right on this issue, and the evidence suggests that those who are against austerity on this basis are likely to be correct.
    We've gone from empirical evidence to "likely to be correct" in just a few posts. While you and I both may have views on some of the many things that lead to economic growth, it is far from as simplistic as "austerity" (however you define it) leads to economies contracting - indeed, we've seen that's straightforwardly not what happens.

    George Osborne said that he would eliminate the deficit by 2015. He didn't. Why? Because he postponed austerity in 2012. Why would he do that, may I ask, and therefore fail to meet his own self-imposed target?

    George Osborne and the Conservatives want to shrink the state, which is why they're implementing austerity. That doesn't mean that they're stupid enough to lose an election for it.

    It wasn't "slightly reduced austerity",
    He "postponed austerity"? So am I right in saying you don't believe we've had "austerity" in this country since 2012?

    Because it seems to me that either (1) we're not currently undergoing austerity or (2) austerity, in the post-2012 model, has provided us with world-leading economic growth.

    For my part, I believe the labelling of something as "austerity" is pretty meaningless, and its effects cannot be understood independently of other factors. If we spend a little less, it may be offset by how we target existing spending.

    Not all spending is the same. Some, like spending on education, infrastructure and so on has obvious benefits to the economy and productivity. Some, like social security - independent of the humanitarian backdrop for providing it - will likely have the opposite effect.
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    (Original post by Arran90)
    Everything renders down to whether the economy is regarded as the plaything of the speculator or the servant of the people.
    Not really. You can accept that free markets have been responsible for the greatest rises in human living standards in history without thinking they must be a "servant of the people". It's a bit like trade itself: to benefit me, something doesn't need to serve me - it can be in my interest for someone else to do well too.

    Equally controlling the economy to make it deliver centrally set outcomes kills the golden goose. Its value is that freely made trade always benefits everyone involved in it, and powers the advancement of society for that very reason.
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    (Original post by L i b)
    Not really. You can accept that free markets have been responsible for the greatest rises in human living standards in history without thinking they must be a "servant of the people". It's a bit like trade itself: to benefit me, something doesn't need to serve me - it can be in my interest for someone else to do well too.

    Equally controlling the economy to make it deliver centrally set outcomes kills the golden goose. Its value is that freely made trade always benefits everyone involved in it, and powers the advancement of society for that very reason.
    A lot of people say that rise in standard is from oil.

    Not disagreeing just saying


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    (Original post by paul514)
    A lot of people say that rise in standard is from oil.

    Not disagreeing just saying


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    Oil (and gas) certainly are key contributors to the rise in living standards.

    Living standards will more than likely deteriorate again when they are no longer available in the quantities that they are now.
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    (Original post by Smack)
    Oil (and gas) certainly are key contributors to the rise in living standards.

    Living standards will more than likely deteriorate again when they are no longer available in the quantities that they are now.
    I could do with an education on it as realistically we could easily switch from oil to alternative fuels especially with the way battery's are going.

    But by products of oil are used in so many things like plastic it's that side I don't know enough about


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    Osborne must step down, he doesn't understand economics. He listens too much to his "advisors", goldman sachs much?

    He wants to hurt the disabled whilst helping the middle class. He's destroying societies moral compass.
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    (Original post by Dumachi)
    Auesterity causes the destruction of the working class, which causes economic contraction, this combined unabated immigration and banks printing funny money is a textbook way to collapse a countrys economy.
    Actually the destruction of the working class is far more closely linked to making so many people reliant upon hand outs, thereby destroying self-sufficiency. So they're not working class, they're muh givemedats class.
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    (Original post by KimKallstrom)
    Actually the destruction of the working class is far more closely linked to making so many people reliant upon hand outs, thereby destroying self-sufficiency. So they're not working class, they're muh givemedats class.


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    They're reliant on handouts because people like you support low paid, insecure jobs. You also then support emasculating unions so workers have less and less protection.

    Then you moan about a reliance culture. If you want people off tax credits then significantly increase wages so they don't need assistance. But of course you'd never support actually doing anything to help these 'reliant' people.
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    (Original post by Bornblue)
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    They're reliant on handouts because people like you support low paid, insecure jobs. You also then support emasculating unions so workers have less and less protection.

    Then you moan about a reliance culture. If you want people off tax credits then significantly increase wages so they don't need assistance. But of course you'd never support actually doing anything to help these 'reliant' people.
    Low pay exists due to too many workers in the economy it's the fault of letting in too many people over the last 15 years


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    (Original post by paul514)
    Low pay exists due to too many workers in the economy it's the fault of letting in too many people over the last 15 years


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    Then raise the minimum wage.
    The idea that if there were no immigrants, that McDonald's would start paying their workers a lot more is laughable and opportunistic.

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    (Original post by Bornblue)
    Then raise the minimum wage.
    The idea that if there were no immigrants, that McDonald's would start paying their workers a lot more is laughable and opportunistic.

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    Rising the minimum wage without leaving the eu as we are currently is a recipe for more immigrants from the eu.

    The laws of supply and demand aren't exactly complicated you know


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    (Original post by paul514)
    Rising the minimum wage without leaving the eu as we are currently is a recipe for more immigrants from the eu.

    The laws of supply and demand aren't exactly complicated you know


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    Don't shift the goalposts.
    You are acting like if it wasn't for immigration businesses would decide to pay their workers more. Rubbish, they will always pay as little as they can get away with.


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    (Original post by Bornblue)
    Don't shift the goalposts.
    You are acting like if it wasn't for immigration businesses would decide to pay their workers more. Rubbish, they will always pay as little as they can get away with.


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    Yea exactly, and they can get away with less when the demand for workers is higher than it is now.

    So much lol


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