tag:blogger.com,1999:blog-6685155377705481833.post6478323729184847510..comments2023-09-22T03:17:50.469-04:00Comments on Middle Class Political Economist: Annals of Austerity FAIL, Eurozone ReduxKenneth Thomashttp://www.blogger.com/profile/05747704671007690674noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6685155377705481833.post-44275103001820972112013-09-02T16:59:13.811-04:002013-09-02T16:59:13.811-04:00As someone living in Ireland, that pretty much sum...As someone living in Ireland, that pretty much sums it up. Austerity is destroying the economy and we're been stagnating for the last 5 years. I'm graduating this week and most of my friends are looking abroad.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-86680366392017021742013-08-21T10:06:32.431-04:002013-08-21T10:06:32.431-04:00The problem with your analysis is that there is no...The problem with your analysis is that there is no control to compare.<br /><br />Were there countries that, prior to these austerity measure taken by Greece, Ireland, Spain, etc., that were in comparable debt but, rather than implementing austerity measures, continued to just accumulate debt until they went bankrupt?<br /><br />How are those bankrupt countries doing now?<br /><br />Austerity may be bad, but are the alternatives worse? The decision by the governments of those countries was that the alternatives were worse. Why do you think they are all wrong?Jackhttp://novatownhall.comnoreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-12621016759366572252013-08-17T14:57:43.785-04:002013-08-17T14:57:43.785-04:00Thanks Kenneth and others - In fairness the Irish ...Thanks Kenneth and others - In fairness the Irish Govt has been pushing the stimulus agenda as hard as it can. Joan Burton our Minister for Social Protection has been particularly vocal on this. The Irish presidency of the EU saw as much push for expansionary policy (couched in terms of 'job creation') as is realistic in a German election year.<br />Here is an article Joan Burton co-authored with some EU colleagues:<br />http://www.theguardian.com/commentisfree/2013/may/28/europe-solution-economic-monetary-union<br /><br />As for leaving the Euro, many economists here were vocally in favour of it for a time - it was probably the right option to take, but it may no longer be... it may never have been politically feasible, but now I think most feel that we're better served by being able to facilitate US trade with the EU by being Eurozone members, given that we've come so far along the road of reducing the primary deficit.<br /><br />As for taking control of the ECB - its agenda is dominated by its explicit mandate to keep inflation low - I think that is a deep-rooted German fear. Progress on this may occur after the German elections and we'll see if it makes good on the commitment to backstop bonds on the secondary market. <br /><br />I will say that Ireland has a vibrant academic economic debate - Stephen Kinsella and Constantin Gurdgiev are too good examples (from different sides of the debate).<br /><br />SJhttps://www.blogger.com/profile/05297404706694592264noreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-81729356508071245032013-08-17T12:13:03.824-04:002013-08-17T12:13:03.824-04:00Then there is no hope. If economists based in Irel...Then there is no hope. If economists based in Ireland cannot make any firm recommendations on austerity or the euro, then Ireland is doomed to one or two lost decades and a destroyed youth for at least one generation.<br /><br />Ireland needs to team up with the other victim countries and take control over the ECB and the EU. <br /><br />As long as all three policy levers are contractive, the economy will not regain escape velocity.<br /><br />1. Contractive fiscal policy - Austerity<br />2. Contractive monetary policy - Too high interest rates, no QE, no credible Lender of Last Resort.<br />3. Contractive regulatory policy - Basel 3 leading to Banks unwilling to lend at the time when we need the banks to support the economy.<br /><br />As long as even the PhD economists in the victim countries doesn't fight against this stupidity as much as they can, there is no hope that the uneducated masses or the politicians will get it. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-30929520885962738562013-08-17T03:25:55.963-04:002013-08-17T03:25:55.963-04:00No, I don't think the Irish government can aba...No, I don't think the Irish government can abandon austerity in isolation. The main culprits now are Germany and the ECB. <br /><br />Only if Ireland left the euro would it have a chance for policy autonomy, and certainly that would have its own set of problems. I don't know enough about what could make that feasible to make any firm recommendation on the euro.Kenneth Thomashttps://www.blogger.com/profile/05747704671007690674noreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-82348930631551553912013-08-16T17:22:05.079-04:002013-08-16T17:22:05.079-04:00In an open economy like Ireland the stimulative ef...In an open economy like Ireland the stimulative effect would be lessened if they go at it alone. The benefits bleed over to trading partners, with little "bleed-back" if those countries don't stimulate too. The obvious solution of course is for the Irish government to ask other EU nations to join in the stimulus effort. And that's really what's missing, I hear precious few top politicians in any country talk about stimulating their own national economies, and as far as I know none is pushing for it on EU-levels. Yet the more countries join in, the greater the impact. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-19415359751332611762013-08-16T13:04:05.817-04:002013-08-16T13:04:05.817-04:00SJ, Let me see... a country must choose between:
...SJ, Let me see... a country must choose between:<br /><br />"increasing its borrowing with the associated risk of increased interest rates on Gov't debt," on the one hand.<br />And, on the other hand, the abandonment of the nation by the people themselves via emigration – the ultimate dismissal of the government ostensibly elected to govern them. <br /><br />Hmm, lemme see... Charles H. Greenhttps://www.blogger.com/profile/03765560656244947934noreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-74456806652956112982013-08-16T11:30:05.133-04:002013-08-16T11:30:05.133-04:00Got here (as many others will) via Paul Krugman. T...Got here (as many others will) via Paul Krugman. Things are indeed still bad here in Ireland, but I don't think anyone seriously expects continued austerity to do anything other than dampen domestic demand and thus for employment to remain high or grow until international demand picks up.<br /><br />Nevertheless, in the absence of a backstop for expansionary borrowing or of a co-ordinated EU-wide stimulus, the Government here has little option but to continue to cut yet more spending this year and next year, lest the markets or the EU/IMF punish us with higher interest rates.<br /><br />Or do you feel that the Irish Government in isolation should abandon austerity and risk increasing its borrowing with the associated risk of increased interest rates on Govt debt?SJhttps://www.blogger.com/profile/05297404706694592264noreply@blogger.comtag:blogger.com,1999:blog-6685155377705481833.post-62918504840361938542013-08-16T11:04:05.532-04:002013-08-16T11:04:05.532-04:00With the twin deficits above 15% of GDP each in 20...With the twin deficits above 15% of GDP each in 2009, the borrowed time of the Greek economy had long been exhausted. The non-option of default led to the two bailouts (110+130 bln), and also a haircut and buy-back of debt that reduced it by some 120 bln.<br /><br />Austerity was not meant to be of the Alesina-Ardagna variety: it was rather what Edward Hugh defined:<br /><br /> What happened .... was not a case of long established living standards being suddenly slashed, it was a case of them being cut back to where they were before they were raised in an unsustainable way in order to win elections.Dimitris Papagiannopouloshttps://www.blogger.com/profile/00285076340060163422noreply@blogger.com