3 ms·

Yurop is getting kind of screwed over by a couple of wars on its periphery that are interrupting things like natural gas and shipping.

jeffbee 3y ago
Europe also largely adopted the bullshit austerity policies that everyone screamed for Biden to adopt, and their economies are languishing for it.
- throw0101d 3y ago
  I thought we were done with the "expansionary austerity" malarkey: * https://en.wikipedia.org/wiki/Expansionary_fiscal_contraction https://en.wikipedia.org/wiki/Expansionary_fiscal_contractio... It's generally a bad idea: * https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Da... Certainly all-spending, all-the time isn't what one necessarily should do, as an already working economy should be left to its own devices so that government spending and fiscal room is around as a form of 'dry powder' to have when the private sector (inevitably) has a downturn.
  - eru 3y ago
    You don't need government spending and fiscal room 'dry powder': Fiscal policy is a really bad lever to pull to get the economy out of a slump. It's very wasteful, and doesn't have much of an influence. (For an example: do you remember the 'fiscal cliff' in 2013 or so? Because of some debt ceiling shenanigans the US federal government dropped spending by a lot, and virtually all pundits were predicting recession. See eg https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1E8M9BC620121109/ https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1... I can dig up more, if you need a reminder. It was all over the news. The fiscal cliff came, and despite the fiscal austerity economic growth actually accelerated.) If you have a competent central bank that's targeting inflation or nominal GDP, they will counteract whatever the fiscal side is doing. The Fed can add or remove money from the economy as they please, and thus bring total spending up or down. The best thing: they can undo mistakes. If they inject too much money, they can subsequently remove that money by selling assets off their balance sheet. That's much easier than 'unspending' on the fiscal side, which is basically impossible.

jeffbee 3y ago

Europe also largely adopted the bullshit austerity policies that everyone screamed for Biden to adopt, and their economies are languishing for it.

throw0101d 3y ago
I thought we were done with the "expansionary austerity" malarkey: * https://en.wikipedia.org/wiki/Expansionary_fiscal_contraction https://en.wikipedia.org/wiki/Expansionary_fiscal_contractio... It's generally a bad idea: * https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Dangerous_Idea https://en.wikipedia.org/wiki/Austerity:_The_History_of_a_Da... Certainly all-spending, all-the time isn't what one necessarily should do, as an already working economy should be left to its own devices so that government spending and fiscal room is around as a form of 'dry powder' to have when the private sector (inevitably) has a downturn.
- eru 3y ago
  You don't need government spending and fiscal room 'dry powder': Fiscal policy is a really bad lever to pull to get the economy out of a slump. It's very wasteful, and doesn't have much of an influence. (For an example: do you remember the 'fiscal cliff' in 2013 or so? Because of some debt ceiling shenanigans the US federal government dropped spending by a lot, and virtually all pundits were predicting recession. See eg https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1E8M9BC620121109/ https://www.reuters.com/article/usa-fiscal-marketdeal-idCNL1... I can dig up more, if you need a reminder. It was all over the news. The fiscal cliff came, and despite the fiscal austerity economic growth actually accelerated.) If you have a competent central bank that's targeting inflation or nominal GDP, they will counteract whatever the fiscal side is doing. The Fed can add or remove money from the economy as they please, and thus bring total spending up or down. The best thing: they can undo mistakes. If they inject too much money, they can subsequently remove that money by selling assets off their balance sheet. That's much easier than 'unspending' on the fiscal side, which is basically impossible.