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To austerity fans: what'll happen if we impose the cuts you want?


feargach

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Dec 11, 2006
Messages
4,995
So, we take another fun jaunt on the circular argument merry-go-round.

Once again, the austerian hordes are demanding that we cut, cut, cut. They repeat, ad nauseam the ever-reducing deficit figures, insisting that these figures demand we eliminate the deficit NOW!!1!!one!!

They stay resolutely silent, of course, on the immediate consequences. There's a pretty obvious reason for this: Greece. They imposed heavy cuts and the entire economy shrank 20%. Very very stupid of the austerians to have demanded that, they now concede. If a Company X owes you money, you might demand that Company X starts cutting spending. But if the spending cuts cause Company X to lose 20% of its customers in a very short space of time, you'll call an end to the cuts if you have any desire to eventually get some of your money back. No company can survive long if it's losing 20% of its customers every few years. You don't get more milk by beating the cow to within an inch of her life. In fact you get less milk as it doesn't lactate as much while it heals.

So I'm putting you on the spot now. Every austerian, tell me what you imagine will happen in the immediate aftermath of imposing €10bn of cuts. GDP will either rise of fall as a result.

1: Will GDP go down immediately after the cuts? Yes/no question, please do not evade a clear answer.

2: If GDP goes down, how far will it go down? At what figure, if any, will GDP cease to fall? Give a figure, please do not evade a clear answer.

NB:In Greece it was 20%, and they only stabilised at that figure because they received a transfer from the Troika, meaning the Troika's Greek austerian plan was a total failure.

3: Will GDP, at some point subsequent to the fall, start to rise again? Yes/no question, please do not evade a clear answer.

4: If some kind of GDP growth does happen, from whence do you see the demand coming from to fuel this growth? Who's going to be buying the goods and services that makes this recovery happen? Specifics, please. Will this demand be mostly from within Ireland or mostly external? Why would they be spending in Ireland then if they're not spending in Ireland now? Don't handwave it away, tackle the issue.
 
Last edited:


R

Ramps

1: Will GDP go down immediately after the cuts? Yes/no question, please do not evade a clear answer.
Yes. So what...

2: If GDP goes down, how far will it go down? At what figure, if any, will GDP cease to fall? Give a figure, please do not evade a clear answer.
How could anyone know.

3: Will GDP, at some point subsequent to the fall, start to rise again? Yes/no question, please do not evade a clear answer.
If the govt. doesn't make the same mistakes again, yes.

4: If some kind of GDP growth does happen, from whence do you see the demand coming from to fuel this growth? Who's going to be buying the goods and services that makes this recovery happen?
The demand will come from people who are spending their own money on goods and services they value.
 

Ryan Tubbs

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Sep 20, 2012
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3,660
The people who demand to know what will happen if there are MORE cuts, tend to be quite poor at telling us how we would pay for it if there were NO cuts.

I'm pretty sure the OP falls into that category.
 

feargach

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The demand will come from people who are spending their own money on goods and services they value.
Why didn't you just say:

The demand will come from carbon-based life-forms.

or

The demand will come from people with two eyes and a liver each, in the overwhelming majority of cases.

or

The demand will to a large extent come from beings who enjoy the music of the Beatles and often consume food with a high fat content.

In economics, we kind of have higher standards of specificity than that. Can you try harder to be more specific? For example, by indicating where they got their money from, where they are located geographically, where their banks are (you should explain how the banks managed to avoid collapsing, because that is far from obvious).
 

stopdoingstuff

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Feb 26, 2011
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22,892
1: Will GDP go down immediately after the cuts? Yes/no question, please do not evade a clear answer.
Obviously it will.

2: If GDP goes down, how far will it go down? At what figure, if any, will GDP cease to fall? Give a figure, please do not evade a clear answer.

NB:In Greece it was 20%, and they only stabilised at that figure because they received a transfer from the Troika, meaning the Troika's Greek austerian plan was a total failure.
How can anyone possibly know?

3: Will GDP, at some point subsequent to the fall, start to rise again? Yes/no question, please do not evade a clear answer.
Yes.

4: If some kind of GDP growth does happen, from whence do you see the demand coming from to fuel this growth? Who's going to be buying the goods and services that makes this recovery happen?
The people who are not spending now are deferring consumption. At some point this money will be invested and spent.
 

feargach

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4,995
The people who demand to know what will happen if there are MORE cuts, tend to be quite poor at telling us how we would pay for it if there were NO cuts.

I'm pretty sure the OP falls into that category.
You ought to be aware that the IMF (which is to say, the people who loan us money with the expectation of getting it paid back) are among the people who are opposed to more cuts.

If you think we will be unable to repay, you really ought to explain why the IMF doesn't agree with your analysis.
 

feargach

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Dec 11, 2006
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4,995
The people who are not spending now are deferring consumption. At some point this money will be invested and spent.
Who the hell are they? Are they in Ireland, the Caymans, London or what?

It's pathetic how evasive the austerians are, once you put them on the spot. They really have a nerve, pontificating like they do, knowing they have nothing but evasive non-specific blather to offer when they're asked to explain their solutions.
 

Amnesiac

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Oct 27, 2011
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1,035
How about somebody looks up the definition of GDP, then tells me why it's a surprise that it falls when government spending is cut.
 

realistic1

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Messages
11,402
So, we take another fun jaunt on the circular argument merry-go-round.

Once again, the austerian hordes are demanding that we cut, cut, cut. They repeat, ad nauseam the ever-reducing deficit figures, insisting that these figures demand we eliminate the deficit NOW!!1!!one!!

They stay resolutely silent, of course, on the immediate consequences. There's a pretty obvious reason for this: Greece. They imposed heavy cuts and the entire economy shrank 20%. Very very stupid of the austerians to have demanded that, they now concede. If a Company X owes you money, you might demand that Company X starts cutting spending. But if the spending cuts cause Company X to lose 20% of its customers in a very short space of time, you'll call an end to the cuts if you have any desire to eventually get some of your money back. No company can survive long if it's losing 20% of its customers every few years. You don't get more milk by beating the cow to within an inch of her life. In fact you get less milk as it doesn't lactate as much while it heals.

So I'm putting you on the spot now. Every austerian, tell me what you imagine will happen in the immediate aftermath of imposing €10bn of cuts. GDP will either rise of fall as a result.

1: Will GDP go down immediately after the cuts? Yes/no question, please do not evade a clear answer.

2: If GDP goes down, how far will it go down? At what figure, if any, will GDP cease to fall? Give a figure, please do not evade a clear answer.

NB:In Greece it was 20%, and they only stabilised at that figure because they received a transfer from the Troika, meaning the Troika's Greek austerian plan was a total failure.

3: Will GDP, at some point subsequent to the fall, start to rise again? Yes/no question, please do not evade a clear answer.

4: If some kind of GDP growth does happen, from whence do you see the demand coming from to fuel this growth? Who's going to be buying the goods and services that makes this recovery happen?

The majority of people that are championing austerity are not and will not be impacted by any of the cuts because these individuals are well off. If the 'austerity fans' get what they want, I reckon these individuals get some sick kick knowing they are considerably wealthier than the misfortunes who will feel the pain of Austerity.
 

curiousorange

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You ought to be aware that the IMF (which is to say, the people who loan us money with the expectation of getting it paid back) are among the people who are opposed to more cuts.

If you think we will be unable to repay, you really ought to explain why the IMF doesn't agree with your analysis.
The devil can quote scripture etc.

Various IMF officials have mixed the sweet with the sour. The IMF have demanded all kinds of cuts which you seem to reject, but a bit of PR from them and you're licking their arses.

Pathetic.

And as has been pointed out a zillion times how much austerity has there been when the government spent twice what it received in taxes for years? The very definition of a socialist paradise.
 

curiousorange

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Ah yes, the banks, the banks, the banks. Lets just ignore the fact that most of debt is from spending more than the government takes in taxes.
 

feargach

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The majority of people that are championing austerity are not and will not be impacted by any of the cuts because these individuals are well off. If the 'austerity fans' get what they want, I reckon these individuals get some sick kick knowing they are considerably wealthier than the misfortunes who will feel the pain of Austerity.
Actually, I would strongly expect that a lot of those guys (usually guys) will actually end up on the breadline if the plan comes into being. It's funny how many of the cut-championers are people who depend on welfare.
 

henryhill

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Ramps said:
Yes. So what...
So that imposes great hardship on lots of people. Isn't that what economic policies are supposed to avoid?

It also makes the position less sustainable, as the debt/GDP ratio is what is important, not the absolute debt figure.
 

Mossy Heneberry

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Actually, I would strongly expect that a lot of those guys (usually guys) will actually end up on the breadline if the plan comes into being. It's funny how many of the cut-championers are people who depend on welfare.
If we are not going to do any cutting, please then tell us where do we get the money to continue to run a budget deficit?
 

feargach

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The devil can quote scripture etc.

Various IMF officials have mixed the sweet with the sour. The IMF have demanded all kinds of cuts which you seem to reject, but a bit of PR from them and you're licking their arses.

Pathetic.

And as has been pointed out a zillion times how much austerity has there been when the government spent twice what it received in taxes for years? The very definition of a socialist paradise.
How about you point out the specifics of what your demands for further cuts (to which the IMF is opposed) entails?

Don't you see how contemptible a position it is, to be demanding a policy while remaining tight-lipped about the consequences?

"I demand you enact this policy NOW!"

"Well, what'll happen if we do?"

"I dunno... stuff, I guess"

Not really all that persuasive, now, is it?
 

feargach

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If we are not going to do any cutting, please then tell us where do we get the money to continue to run a budget deficit?
Again, the IMF is not concerned about this? They are firmly of the belief that Ireland continuing to borrow is far safer than immediate new cuts.

Given that the IMF is our creditor, the answer to your question really ought to be pretty darn obvious.
 

feargach

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Ah yes, the banks, the banks, the banks. Lets just ignore the fact that most of debt is from spending more than the government takes in taxes.
Lets just ignore the fact that you have absolutely nothing in the way of specific positive consequences of the policy you espouse.
 

davoid

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Who the hell are they? Are they in Ireland, the Caymans, London or what?

It's pathetic how evasive the austerians are, once you put them on the spot. They really have a nerve, pontificating like they do, knowing they have nothing but evasive non-specific blather to offer when they're asked to explain their solutions.
i think they may be the people who own the record savings in irish deposit accounts?
 

curiousorange

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And what would have happened in the government had used the money it borrowed fro the banks and spent it on job creation and stimulus?

Chances are we wouldnt be overspending as people would now be in work and paying taxes.

Everything goes back to the banks, and we still continue to starve the real economy for the sake of the EU, Banks and Bondholders.
If we got a deal on the bank debt tomorrow we would still be up to our eyeballs in debt for spending billions more on social welfare and public pay than the government takes in taxes.
Things would be better if we reduced the bank debt, but its only the blind, and vested interests, who say that the bank debt is our only problem and we would not need to reduce spending or raise taxes without it. There are plenty who don't want anyone to look beyond the bank debt because they know their own income is being funded by massive borrowing by the country.
 

realistic1

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If we are not going to do any cutting, please then tell us where do we get the money to continue to run a budget deficit?
If Austerity is to continue and be supported, our Politcal leaders should show leadership and take considerable cuts to their own terms and conditions.
 

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