By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Politics - Europeon Debt Crisis: There isn't another option EXCEPT austerity.

sperrico87 on 21 April 2012
makingmusic476 said:
SamuelRSmith said:
Why is it austerity when the Government stops spending your money? I mean, this is how badly the "establishment" has engrained the need for big government in our lives... keeping more of your wealth is now a bad thing.


We truly do have fundamentally different views of the role of currency in society.

You're more of the mindset that money ultimately comes from the people, and is taken by the government to be used for various goods.  A view I once held.

 

Why are taxes so important to you?  You probably don't receive social welfare benefits and sit around lounging all day, allowing the working-class to fund your life style.  You seem like a reasonable, educated person.  We wouldn't need so many of those taxes you speak of if we didn't have so many programs to discourage people from looking for work, and worse, discourage businesses from investing.

Redistribution of wealth is morally abhorrent and the worst thing the government's done to us in the last 100 years is implement a central bank to destroy our money, and place an income tax on us, which fundamentally says: "You don't own your money, we just let you keep some of it.  We can spend it more wisely than you can.  You're not smart enough to take care of yourself and your family, so we're going to do it for you, against your will." 



 

Around the Network
Scoobes on 21 April 2012
makingmusic476 said:

They were never really seen as viable options when I was younger either, and they're areas I'm only just now looking into given I'm hard up for work.

I wish I had stuck with computer science in college.  I've always had a nack for programming, but I didn't stick with it for dumb reasons.  I sit here today wondering if it's too late to go back to that, and whether I could make it in that field without paying for an expensive education that I definitely can't afford.

If you already know how to program or think you could pick it up easily but don't have the money for courses, you could always try self-learning and try building up a personal portfolio. I'm not in the field so I can't say for sure what employers are looking for but it might be a good starting point.




Get your Portable ID!

Soleron on 21 April 2012

I'd like to see a cascading default. I'd like to see it, because it would force the correct course of action rather than each bailout that prolongs the uncertainty.

It would be a depression that would lower people's expectations of living standards enough to do the right thing.



Rath on 21 April 2012

I agree, austerity measures are needed to bring the country into surplus.

These measures need to include both increases in taxes and spending cuts. I'm really a fan of the 'Buffett' tax, it only seems sensible.



Kasz216 on 21 April 2012
Akvod said:
Let me ask a question.

Will you recommend a high school student about to graduate from high school to:
1) Get a job immediately
2) Take a student loan, and go to college.

Actually, let's take an even further step back. What exactly are you against? Surely, you aren't against debt itself, are you? Wall Street executives will call you an idiot, because it's their source of income. People on "main street"? They wouldn't be able to pay for their houses.

Scorning debt for the sake of it being debt is stupid. It's anti-capitalist. In fact, I'll fucking call it socialist:

"...The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.

The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter’s wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury. The state-creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would. But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation-as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven-the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy." - Karl Marx

http://histologion.blogspot.com/2010/02/karl-marx-on-public-debt.html

----------------------------------------------------
Debt and capital is crucial to an economy. It allows for the maximum use of our resources. Let's go back to the student loans. If you imagine a graph where the amount of capital we need is on the y-axis and time is on the x-axis, you'll find that you'll have a huge arc near your early years, then a dip during the middle years, and then another spike during your final years of life. Lending allows people who don't need money right now, to give it to people who need it now.

Cash sitting in the bank, is simply paper. Cash circulating results in resources being moved.

Bad debt, is when things that DON'T PRODUCE FUTURE WEALTH are being financed (and to be more specific, don't produce the amount of wealth that could have been created by financing something with similar risk).

Public spending during a time of depression has enormous returns compared to its costs, compared to austerity, which can permanently depress an economy and cripple entire generations.

You know, that was a big, pretty much completely off topic question there.

You didn't even begin to try and argue the point, or any point really.

Again, where's this money come from?   This isn't like the US economy where there was even a choice.

Your essentially argueing that a student (europe) should take out hundreds of thousands of dollars in loans to get a social work degree from Harvard with no will way to pay it back, or any real future to make what it owes.  Well actually it's aleady done that... and your argueing it should take out even more loans with literally no prospect of paying them back, paying more and more money, hoping to get growth equal to a fraction of what it's spent.

 

I mean, who are the healthiest countries right now?   Germany, Australia, New Zealand.  The countries that were pretty much against having any type of huge deficits and are some of the most "Conservative" of modern economic countries.

And i mean this in a fiscal policy way, not the counfounding "more or less taxes" way.



Around the Network
Kasz216 on 21 April 2012
routsounmanman said:
Kasz216 said:

Lately there have been more and more articles in the US complaining about Europeon Austerity and how it will destroy the country.

It makes me wonder what other option there actually is.   The europeon Debt Crisis is happening because a number of countries didn't cut spending when they could and are rapidly approaching (or already reached) the point where they can't pay off their debts.

Some people are saying that instead they need to keep spending up, possibly even increase it and hope to outgrow the debt.

Which seems impossible just based on the fact that they weren't outgrowing their debt even when the economy was good.


The only real way to get out of it, is to try and spur growth while NOT increasing debt.  In otherwords, Austerity, and then a bit beyond normal austerity to provide pro-growth changes.


In otherwords cut more then you need to and put that extra money elsewhere.

I really think that the Euro was the stupidest idea of the 21st century, Europe must leave it back and go back to national currency. And many countries drowning in debt is not just because of excessive spending, it's also due to the Euro strangling their economies.

While countries like Germany benefit greatly from the Euro as the other participating countries keep its value low and keeping their exports competitive, others like Greece, Spain, Portugal that have been relying on devaluing their currency to stay competitive, ended up choked, thus the debt bubble.

Another plan I can think of, is a Marshal plan to any country now in trouble, much like Germany and other countries got after WWII. But that's very doubtful with the current political scheme.

One thing's for sure, austerity brings recession, which in turn grows deficits and debt, a deadly spiral. Greece will never recover from the debt, even after a long due PSI, and after we fall, Portugal, Ireland and Spain will follow...

A) Greece was in a Death spiral before austerity.  Even when it was having growth, it's growth was growing faster.

B) Who's going to pay for this Marshal Plan?  Germany doesn't have the cash to bail out Greece, Italy, Spain, and likely even France.



Kasz216 on 21 April 2012
Rath said:
I agree, austerity measures are needed to bring the country into surplus.

These measures need to include both increases in taxes and spending cuts. I'm really a fan of the 'Buffett' tax, it only seems sensible.


I wouldn't mind seeing tax increases, but the Buffet Rule just seems problematic.  It is afterall essentially a giant tax on new investments.  I don't know if they've properly covered the buffet tax in New Zealand, because few places can actually barely be forced to cover it correctly here but essentially it's an "Alterantive Minium Tax" that taxes investments and only hits people whos main form of income is people who put most of their money in the economy through investments and stocks.

Such a thing would likely case hesistance in areas of high risk. (which is where rich people are valuable) and cause a move more towards "safer" invesments.  Which would make things hard for the average investor. (something like 40-60% of people hold investments in the US.)

Problematic because rich people investing is more or less "Free" stimulus, without the need of the government taking on a huge debt that it may or may not ever decide to pay off.

 



Kasz216 on 21 April 2012

Also, the difference between government debt, and the debt of a private citizen is that.... the private citizen tries to make a profit, and eventually stop running up debt.

The Federal government NEVER tries to make a profit. Or at least MOST don't. (Outside a few of the "smart" ones. Well smart economically, it's hard to call the Australian government smart per say.)

So they run deficits, hoping that growth in the surrounding economy will increase growth.

However to "make it back" you need

A) To make it so you get at least as much back in growth, as you paid. In other words, if you had a flat tax rate of 25% you'd have to grow the economy times 4 based solely on your debt spending. Since you keep debt spending every year anyway.

B) Keep doing this, forever, because as stated, the government never stops running a deficit.

This is especially difficult in countries in Europe like Greece where the government is a main employer. After all, in this system, government employees are a HUGE drain aren't they? After all, they can only pay a percentage of what you pay them in taxes... meaning you need a smaller part of the economy to grow more rapidly the more you focus on government spending.



Akvod on 21 April 2012
HappySqurriel said:
Akvod said:
HappySqurriel said:
Akvod said:
HappySqurriel said:
Akvod said:


Yes. Let's go back to the old guild days in the middle ages. You're sound like a classical socialist.

I don't understand your point ... Skilled trades are (probably) the most entrepreneurial and purely capitalist field within our economy and are becoming far more important as fewer people learn how to do the work themselves.

Here is a good video for you to watch:

I'm not watching a 20 minute video. Trade skills are worth shit, they aren't what made America into an industrial nation mass producing cars and machines. Now we need to transition from having tangible assets into having high human capital (which we're doing amazing, despite what critics of America say. What country has as many prestigious research universities as us? Where are Microsoft, Google, Apple, Facebook, etc located at?).

It's fucking theoretical fuckers like you, who are weirdly mixing up the philosphies of anti-federalists, socialists, libertarians, and objectivists that are dooming this world.

 

I guess you are the embodiment of the statement "Ignorance is Bliss" ... If you would have bothered to watch the video you would have gotten the point

The economy needs both knowledge based jobs and people in the skilled trades but for decades there has been a massive push to emphasize "higher education" and de-emphasize the trades. To make matters worse, the emphasis has not been on getting higher education to give you valued skills but to get people to follow their passion. The net result has been that we're graduating an excessive amount of people from Universities with no skills, while we're failing to graduate enough people from tradeschools with skills that are already in high demand.

Outside of Engineering, Computer Science and Nursing I would not recommend anyone get a university degree because they will be no more qualified to work in a knowledge based economy than a highschool graduate.

Years ago I remember reading an article about the typical millionare in Canada and it wasn't what people expected. It was an individual in their mid 30s who worked in the trades, owned their own business, drove an 8 year old Ford F150, had no debt and lived in a modest house. I have seen this in my own life several times as the people I knew in high-school that are living the "good life" are in the trades, while most university graduates are struggling to get by. Believe what you want, but for every college graduate who is really using their degree there are (currently) dozens who are underemployed because they failed to even consider the trades.

Our economy is not in the situation it is in now, because we have a lack of supply in carpenters, cleaners, and whatever fucking jobs Mike Rowe covers. If that was the source of the problem, Jesus, they must have huge influence on the global economy.

So IDK. I guess I'm just confused. You're trying to make this some kind of philisophical argument about what "value" and "work" is (again, you're starting to sound socialist, that try to equate value as labor), or trying to make the economy as a function of the nation's "character" (oh, it's because everyone wants to get rich and do no work).

 

The problem with all those arguments (aside from the fact that they're wrong), is that they're too easy. In a way, it's kind of like that with Japan. By tying everything as a matter of "national character" (BTW, now it's a bit remincent of fascism) or something like that, you sort of doom yourself (in the case of Japan), or make it sound like you can solve EVERYTHING by fixing the nation's "character". And making that fix involves making some huge, radical changes like cutting all the government agencies and dismantling all social welfare (and I'm terrified of what the OWS folks are going to propose, once they become more organized).

America's "character" or Japan's "character" have nothing to do it with it. We don't need sweeping radical changes to our society. We need technocratic solutions that have worked pretty consistently and well for the past few decades. Not ideology.


You really just don't get it ...

I'm not talking about some grand economic problem, I'm talking about someone being able to find a satisfying job that pays the bills and gives them an adequate lifestyle. There are enough morons in this world who believe that (somehow) studying English Literature will prepare them to make meaningful contributions to the economy of tomorow, or are simply too lazy to do manual labour for a living, that there will be an ever growing shortage of people in the skilled trades to do the work that needs to be done; and this basically means that you will be ensured a stable upper middle class lifestyle if you go this route.

 

 

To put it another way, there are so many people graduating from worthless degree fields that law school and business school enrollment has skyrocketed over the past decade. What were once (almost) guaranteed ways to get a job and receive a 6 figure income are now very difficult fields to break into, and most people getting jobs are receiving very average incomes. Essentially, people are spending 6 to 8 years of their lives and building up $100,000+ in student loan debt to graduate with a degree where new grads have a high unemployment rate (after 1 year) and those that are employeed have are lucky to earn $50,000 to $60,000 per year.


Errr... Isn't this a topic about the macroeconomy? If you're not on that topic, you should stop posting in this thread.

And second of all, the topic you're talking about has 2 sides to it.

First is the macro economic side. We're barely adding jobs at the moment, so of course college graduates aren't finding any fucking jobs.

Second is a micro economic (for lack of a better word) issue. You have a few things going on, and the issue's really complex that I don't feel confident to answer what exactly is going on. In fact, I sort of hate the topic because so many issues get talked about at once. You have some people talking about globalization. Some people talking about the academic standards and grade inflation at colleges. Then you have people going back to how America sucks and we need to fix its national character and what not.

One topic that I think is interesting is financing and for profit universities though. Here's a discussion panel by Al Jazeera I think you might find interesting:

If you want to talk about the job market for college undergrads though, count me out of it. I'm not an economist so that's way out of my league.



Rath on 21 April 2012
Kasz216 said:
Rath said:
I agree, austerity measures are needed to bring the country into surplus.

These measures need to include both increases in taxes and spending cuts. I'm really a fan of the 'Buffett' tax, it only seems sensible.


I wouldn't mind seeing tax increases, but the Buffet Rule just seems problematic.  It is afterall essentially a giant tax on new investments.  I don't know if they've properly covered the buffet tax in New Zealand, because few places can actually barely be forced to cover it correctly here but essentially it's an "Alterantive Minium Tax" that taxes investments and only hits people whos main form of income is people who put most of their money in the economy through investments and stocks.

Such a thing would likely case hesistance in areas of high risk. (which is where rich people are valuable) and cause a move more towards "safer" invesments.  Which would make things hard for the average investor. (something like 40-60% of people hold investments in the US.)

Problematic because rich people investing is more or less "Free" stimulus, without the need of the government taking on a huge debt that it may or may not ever decide to pay off.


It's a giant tax on income from investments for people earning above a threshold. It's not right that people earning millions pay far less a percentage of their income in tax than somebody earning a middling wage. I find regressive taxation systems morally wrong.