4 ms·

No indeed, let us continue to double down on austerity, given its truly astonishing success so far

88 4y ago
If you completely ignore the context of a global financial crisis in 2008 and pandemic in 2020, I suppose you might think austerity has been unsuccessful.
- deathcakes 4y ago
  I'm genuinely curious to the reasoning behind austerity - I confess to not having any academic qualifications in economics but it does seem to me that deliberately removing services from the poorer sections of society is going to introduce more friction to the system, which will lead to poorer outcomes in general. The fact that our public debt continued to soar, even before the pandemic, seems to me to suggest that even on its own terms it wasn't a winning argument. Do you have any sources that make the argument for austerity? This is a genuine question - as I say I have no formal background in the subject but from what I've managed to find I have found little in the way of convinvcing arguments.
  - 88 4y ago
    Austerity is not a difficult policy to understand. If your personal debts had grown exponentially over the past year, and your income showed no signs of exceeding your outgoings, would you not make some effort to reduce your outgoings?
    - growse 4y ago
      This analogy is asinine because countries are not people. Their finances don't work even remotely similarly.
      - 88 4y ago
        Please enlighten me on how people and countries differ in the basic concepts of having income, outgoings, and debts
        growse 4y ago
        For example, people don't tend to own their own currency. I'm sure you can think of other differences.
        88 4y ago
        Does that mean the UK doesn’t have income, outgoings and debts?
        darrenf 4y ago
        It's much too reductive a framing, IMO. Public sector spending is not, majorly, an "outgoing" of "the UK" in any reasonably comparable way to an individual's spend - rather, public sector money generally funds services within the UK which employ individuals who a) pay income taxes directly b) spend their income in other parts of the economy, where VAT/corporation tax/etc feed back to HMRC, and companies profit and grow. It's really nothing like an "I've spent £5 on a beer and now that fiver is gone forever" outgoing, in scale or effect.
    - rwmj 4y ago
      Ah yes, the "maxing out the country's credit card" argument. The national debt is owed in £'s, which the government can create and destroy at will, and much of it is one arm of the government owing another arm of the government. It's nothing like personal debt.
      - 88 4y ago
        Yes of course, the UK could simply print enough money to repay all its debts and that wouldn’t have any harmful or damaging effects on its economy whatsoever…
        rwmj 4y ago
        It's a good job I didn't say that then isn't it?
        88 4y ago
        So what is your point? The UK cannot print its way out of its debts, so what’s the relevance?
kergonath 4y ago
Lowering taxes is counterproductive, though. The problem is sharing the burden with the wealthier. At some point, you can't really get something for nothing and we have to accept that if we want first-world services and infrastructure, we have to pay for them. And paying for them through taxes is way more efficient than just letting private companies extract their benefits from tolls and such.
- deathcakes 4y ago
  I agree with this - I was making the point that austerity, by the terms of its own argument, hasn't worked. Reducing public spending has demonstrably not reduced our debt burden even before the pandemic, and so therefore I would suggest we abandon it.
  - kergonath 4y ago
    Definitely, it was a resounding failure of the modern Neo-liberal ideas. What worries me though is the cakeist populists who are feeding on resentment and who are in power or close to it in several European countries (including the UK). There will need to be a tax increase, probably not for most people, but in terms of tax revenues.
- truculent 4y ago
  The problem is that the effective taxation rate is unbalanced. Lowest income groups and new graduates are paying more than the highest income ones! Lowering tax on the majority of people need not lower tax so significantly if paired with higher tax rates at the top. Or so my understanding goes.

88 4y ago

If you completely ignore the context of a global financial crisis in 2008 and pandemic in 2020, I suppose you might think austerity has been unsuccessful.

deathcakes 4y ago
I'm genuinely curious to the reasoning behind austerity - I confess to not having any academic qualifications in economics but it does seem to me that deliberately removing services from the poorer sections of society is going to introduce more friction to the system, which will lead to poorer outcomes in general. The fact that our public debt continued to soar, even before the pandemic, seems to me to suggest that even on its own terms it wasn't a winning argument. Do you have any sources that make the argument for austerity? This is a genuine question - as I say I have no formal background in the subject but from what I've managed to find I have found little in the way of convinvcing arguments.
- 88 4y ago
  Austerity is not a difficult policy to understand. If your personal debts had grown exponentially over the past year, and your income showed no signs of exceeding your outgoings, would you not make some effort to reduce your outgoings?
  - growse 4y ago
    This analogy is asinine because countries are not people. Their finances don't work even remotely similarly.
    - 88 4y ago
      Please enlighten me on how people and countries differ in the basic concepts of having income, outgoings, and debts
      - growse 4y ago
        For example, people don't tend to own their own currency. I'm sure you can think of other differences.
        88 4y ago
        Does that mean the UK doesn’t have income, outgoings and debts?
        darrenf 4y ago
        It's much too reductive a framing, IMO. Public sector spending is not, majorly, an "outgoing" of "the UK" in any reasonably comparable way to an individual's spend - rather, public sector money generally funds services within the UK which employ individuals who a) pay income taxes directly b) spend their income in other parts of the economy, where VAT/corporation tax/etc feed back to HMRC, and companies profit and grow. It's really nothing like an "I've spent £5 on a beer and now that fiver is gone forever" outgoing, in scale or effect.
  - rwmj 4y ago
    Ah yes, the "maxing out the country's credit card" argument. The national debt is owed in £'s, which the government can create and destroy at will, and much of it is one arm of the government owing another arm of the government. It's nothing like personal debt.
    - 88 4y ago
      Yes of course, the UK could simply print enough money to repay all its debts and that wouldn’t have any harmful or damaging effects on its economy whatsoever…
      - rwmj 4y ago
        It's a good job I didn't say that then isn't it?
        88 4y ago
        So what is your point? The UK cannot print its way out of its debts, so what’s the relevance?

kergonath 4y ago

Lowering taxes is counterproductive, though. The problem is sharing the burden with the wealthier. At some point, you can't really get something for nothing and we have to accept that if we want first-world services and infrastructure, we have to pay for them. And paying for them through taxes is way more efficient than just letting private companies extract their benefits from tolls and such.

deathcakes 4y ago
I agree with this - I was making the point that austerity, by the terms of its own argument, hasn't worked. Reducing public spending has demonstrably not reduced our debt burden even before the pandemic, and so therefore I would suggest we abandon it.
- kergonath 4y ago
  Definitely, it was a resounding failure of the modern Neo-liberal ideas. What worries me though is the cakeist populists who are feeding on resentment and who are in power or close to it in several European countries (including the UK). There will need to be a tax increase, probably not for most people, but in terms of tax revenues.
truculent 4y ago
The problem is that the effective taxation rate is unbalanced. Lowest income groups and new graduates are paying more than the highest income ones! Lowering tax on the majority of people need not lower tax so significantly if paired with higher tax rates at the top. Or so my understanding goes.