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>> (3) whether these aims were successful? With the exception of Germany post-WW2, has there ever been an instance where austerity was judged to be somewhat su

>> (3) whether these aims were successful? With the exception of Germany post-WW2, has there ever been an instance where austerity was judged to be somewhat successful? There are hundreds of examples of austerity, which could be added to the wiki page as a success?

mjburgess 3y ago
I can't think of a case where austerity wasnt successful. In the UK's case it was overwhelmingly successful. That it didnt meet the goals given to it by opposition parties and newspapers is irrelevant.
- CraigJPerry 3y ago
  The original goal was simple: Reduce the deficit sufficiently to promote confidence in the market for UK debt in order to deliver growth in the economy. You claim this was overwhelmingly successful? How? Where would we see evidence of success? Would it show up in a change in bond yield trajectories post GFC? (It doesn’t). Would we see a change in the growth rate of the economy post GFC? (We didn’t). So how is it possible it was not just successful but overwhelmingly so when we can’t detect the proposed benefits in the observed data?
  - mjburgess 3y ago
    Austerity had nothing to do with growth. It was to reduce the increasing deficit from +12.5% GDP YoY to flat, in the middle of essentially a "deficit crisis" caused by the need to bail out the financial industry to prevent a whole-economy crisis. Arguments can be made about how far and how fast the deficit needed to decrease; but the policy was overwhelmingly successful. The government was able to maintain non-trivial deficits for a decade after the policy -- precisely because of it. Only people with zero understanding of the issue maintain that there was any non-austerity alternative. Labour's policy was "less" not different. There was no non-austerity option for the UK, with such dramatic deficit increases -- ie., 25% of GDP in <2yr. Few other countries experienced this. The US did not. The financial crisis should've caused a depression in the UK, and a total wipeout of our economy in a whole economy crisis. The bailouts prevented this, then austerity prevented the ensuing deficit crisis. Both policies were not about "growth" they were about preventing total economic metldown in the UK. We were the worst country in the world affected, these conditions were unique and severe.
    - CraigJPerry 3y ago
      >> Austerity had nothing to do with growth. George Osborne originally said: >> Mr Deputy Speaker, let me now turn to the measures in the Budget designed to deliver this accelerated reduction in the structural deficit. The coalition Government believes that the bulk of the reduction must come from lower spending rather than higher taxes. The country has overspent; it has not been under-taxed. Our approach is supported by the international evidence, compiled by the Organisation for Economic Cooperation and Development, the International Monetary Fund and others, which found that consolidations delivered through lower spending are more effective at correcting deficits and boosting growth than consolidations delivered through tax increases. >> “and boosting growth” I’m having a hard time seeing this as anything other than intellectual dishonesty on your part. Given this is HN, I’ll be curious instead of judgemental. Help me interpret what you said about austerity had nothing to do with growth?
      - mjburgess 3y ago
        It's literally the first sentence of your own quote: > Mr Deputy Speaker, let me now turn to the measures in the Budget designed to deliver this accelerated reduction in the structural deficit.
Aunche 3y ago
Austerity is often times the least bad option when compared to hyperinflation and a complete withdrawal of creditors. Neither were realistic scenarios for the UK, so I agree that austerity as a ideological goal like it was in the UK doesn't make any sense. As far as successes go, Greece and Spain can be considered successes as they were legitimately at risk of losing their Eurozone status.

mjburgess 3y ago

I can't think of a case where austerity wasnt successful. In the UK's case it was overwhelmingly successful. That it didnt meet the goals given to it by opposition parties and newspapers is irrelevant.

CraigJPerry 3y ago
The original goal was simple: Reduce the deficit sufficiently to promote confidence in the market for UK debt in order to deliver growth in the economy. You claim this was overwhelmingly successful? How? Where would we see evidence of success? Would it show up in a change in bond yield trajectories post GFC? (It doesn’t). Would we see a change in the growth rate of the economy post GFC? (We didn’t). So how is it possible it was not just successful but overwhelmingly so when we can’t detect the proposed benefits in the observed data?
- mjburgess 3y ago
  Austerity had nothing to do with growth. It was to reduce the increasing deficit from +12.5% GDP YoY to flat, in the middle of essentially a "deficit crisis" caused by the need to bail out the financial industry to prevent a whole-economy crisis. Arguments can be made about how far and how fast the deficit needed to decrease; but the policy was overwhelmingly successful. The government was able to maintain non-trivial deficits for a decade after the policy -- precisely because of it. Only people with zero understanding of the issue maintain that there was any non-austerity alternative. Labour's policy was "less" not different. There was no non-austerity option for the UK, with such dramatic deficit increases -- ie., 25% of GDP in <2yr. Few other countries experienced this. The US did not. The financial crisis should've caused a depression in the UK, and a total wipeout of our economy in a whole economy crisis. The bailouts prevented this, then austerity prevented the ensuing deficit crisis. Both policies were not about "growth" they were about preventing total economic metldown in the UK. We were the worst country in the world affected, these conditions were unique and severe.
  - CraigJPerry 3y ago
    >> Austerity had nothing to do with growth. George Osborne originally said: >> Mr Deputy Speaker, let me now turn to the measures in the Budget designed to deliver this accelerated reduction in the structural deficit. The coalition Government believes that the bulk of the reduction must come from lower spending rather than higher taxes. The country has overspent; it has not been under-taxed. Our approach is supported by the international evidence, compiled by the Organisation for Economic Cooperation and Development, the International Monetary Fund and others, which found that consolidations delivered through lower spending are more effective at correcting deficits and boosting growth than consolidations delivered through tax increases. >> “and boosting growth” I’m having a hard time seeing this as anything other than intellectual dishonesty on your part. Given this is HN, I’ll be curious instead of judgemental. Help me interpret what you said about austerity had nothing to do with growth?
    - mjburgess 3y ago
      It's literally the first sentence of your own quote: > Mr Deputy Speaker, let me now turn to the measures in the Budget designed to deliver this accelerated reduction in the structural deficit.

Aunche 3y ago

Austerity is often times the least bad option when compared to hyperinflation and a complete withdrawal of creditors. Neither were realistic scenarios for the UK, so I agree that austerity as a ideological goal like it was in the UK doesn't make any sense. As far as successes go, Greece and Spain can be considered successes as they were legitimately at risk of losing their Eurozone status.