Popular Conservative Austerity argument Debunked?

[Mr Khan]

Kasz216 said:

the2real4mafol said:

Kasz216 said:

the2real4mafol said:

dsgrue3 said:

Pemalite said:

Kasz216 said:

I'd point out that the UK's GDP gro
Even if you think the debt spending is making the difference... why kill yourself for 2%, building up a future huge disaster?  When you could have 1% and have a safer future?

Espiecally if nearly all that 1% is a boost soley due to government spending!

I wouldn't say *everywhere* Australia avoided recession during the global economic collapse and has maintained growth through the whole ordeal.

Sure?

Certainly looks like it dipped into a recession at a couple points.

Furthermore, any growth <2% is considered poor, let alone <1% which is anemic.

At least they are growing, we in the UK are amazed at .3% growth. How pathetic!! Sadly, it's the same across much of Europe too. We are just so screwed. Australia must at least maintain what it's got.

This graph is the UK's poor economy

 

Yeah... and a lot of Australia's growth in the past 20 years has been a huge commodities boost of raw matierials.

While the UK's GDP Growth has mostly all been in it's banking sector.   

The UK is honestly... doing strikingly well when you consider the main driver of their growth has been the same area that had a huge collapse.

It's not like you guys have huge swarths of untapped land and resources or even a lot of real estate. 

We need to update our infrastructure more than anything. We still use sewers from the Victorian ages for example and there are still many post-industrial scars that need to be rebranded and reused for something (its depressing seeing so many empty buildings in some areas!). Thank god we got the olympics which put some money in East London. and we also must re-diversify our economy, relying on mostly services can't be good. 

Upgrading the sewers is fine and all... that's not going to help the economy though.  Hell you'll probably lose jobs since i'm guessing those kind of sewers run better.

As for fixing post industrial scars... that's exactly what austerity plans are suppoesd to include.   Pro buisness reforms to attract buisness.

Since Austerity is  a lot like cutting costs at a faiing resteraunt.   All it does is buy you more time.

 

If we were looking at it through John Maynard Keynes perspective... Stimulus spending probably actually wouldn't be his first suggestion.   He'd likely find it a waste of money currently.  Why?  The United Kingdoms HUGE trade imbalance.   He would find it illogical to spend stimulus money when a lot of it would end up overseas and would first suggest trying to eliminate the trade balance.   He'd probably want to cut ties with the Euro.  He was for the Bancour, but that was back when the rich countries were the ones with the trade surpluses.

Afterall, how does a demand driven muliplier work, when the majority of the money we buy go back to foreign manufacturers and producers?    You go out an buy a bunch of Nintendo games with your stimulus money, and the majority of your money is going straight to Japan.

What would Keynes want... the government to spend... to give the rich incentives to invest in the USA and UK.

I'd suggest the Economic Consquences of Peace if you have time.  It's free because the publishing rights have expired.  (Oops, in the US.  You may want to check United Kingdom Copyright law before reading)

http://www.gutenberg.org/ebooks/15776

It'd likely give you a fuller understanding of Keynes.  

Well, not straight to Japan. International trade is not quite so seamless as that, such that demand in one market necessarily produces jobs in that market even if the demand were 100% for foreign made goods. Enough of a boost and NoA would have to hire people, or more Gamestop branches open and they hire more associates

Not that video games are entirely a product where increased demand creates more jobs, though. That's one of the real problems of demand-based economics: it was devised some 60 years before the information age, whereby content generation doesn't have to match the scale of demand, and only delivery networks have to expand. Unlike, say, GM, who rapidly reaches a bottleneck of how many cars they can sell should there be a surge in demand that they don't have enough factories or workers for.

There's still much to be said for demand economics (moreso than the giant tax-evasion scam that is supply-side economics, anyway), but the math complicates dramatically as the notion of "product" becomes more dynamic.