VGChartz Europeans, I need your help.

[Kasz216]

PDF said:

Kasz216 said:

The success of the economy is largely based on how people percieve it is doing.  If people think the economy is good they spend money and the economy grows.  If they think it is doing bad the opposite happens.

Whether government spending is "real" or not doesn't matter as much as long as people thinks it matters.  Large amounts of people losing their jobs creates a negative economic environment.

I think you are looking at austerity in a much more long term context.  I am simply talking about during the recession.

Not nearly as much as you think, no.  Belief in the economy is usually strong right before crashes, and public confidence actually often tends to lag behind economic indicators.

The USA has been a good example of both.

Consumer confidence can help the economy run better... but it can't actually improve the economy...

and sometimes too much confidence is a bad thing.

 

Sacrificing a future stronger base market to make a crappier market run smoother doesn't work out.  You just end out dragging out prosperity and making prospeirty shorter.

I disagree, I have a hard time believing every professor I have ever had is wrong.  Market confidence drives the economy.  Market confidence, won't save you if that confidence is built on a lie because sooner or later you will find out it is a lie.

Not sure what you mean by run better, and yet won't improve the economy.  It's only logical to assume an economy that runs better is an improvement.

 

For many a recession is very painful experience, especially those who lost their jobs.  I am sure they will trade future economic growth for faster growth right now.   If you were starving, you would surely trade a meal now, for two meals when you are no longer starving.

Govn't should be Austacious (is that a word?) when they can afford to be.  It makes no sense to do it when economy is already being constricted.  I've see no evidence that doing this leads to shorter prosperity.

And what's government spending?

A lie.  It's not real.   We're past the age where companies and dumb enough to expand due to temporary demand created by"fake" money.

 

As for what runs better but doesn't imrpove the economy means... it's pretty simple.

The market fundamentals are the size of the pipe... and consumer confidence how it flows.

When you deficit spend, you increase the flow at the expense of shrinking the pipe.  (Though you don't increase the flow much at all when you have a huge trade deficit, see Keynes)

 

Ask your teachers how useful consumer sentiment surveys and confidence are in predicting the economy, and you'll find they don't, at all.

I don't think  every professor you've had is wrong, i just think you've misunderstood every proffessor you've taken.  (Well not every one, but a decent number of them... really i suppose it depends which country your from.)

 

Really the even keel, not overstimulating the economy countries weathered the GFC greatest, and recovered quickest. 

 

There is really no reasonable reason to ever run a deficit outside of an unavoidable war or gigantic humanitarian need... spain doesn't really fit either.

 

Also, it's not really trade a meal now, for two when you aren't starving, so much as, trade for a meal now, so you can starve again in the future.