4 ms·

My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic

My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic crisis were a thing of the past. Then reality happened, and it seems that US government spending has kept the economy going to the dogs. On the other hand, looking around in Europe, I don't manage to find a single country where austerity measures appear to have produced anything than deeper recession.

gadders 14y ago
The UK is hovering around the recession borderline, but I wouldn't say the recession is deeper than is was pre-austerity. On the other hand, Greece tried no austerity, and we see how that played out. //edit//And in the UK - austerity hasn't even started yet. Government spending is still rising in real terms.
- mercurial 14y ago
  Greece has particular problems. A culture of pork barrel, corruption, nepotism and tax evasion (not to mention cooking the books) does not make for sustainable governmental spending. But now that they are implementing unprecedented cuts, the country is going down the drain.
- nickik 14y ago
  The UK barly did any austerity and they raised taxes. What the UK does has nothing todo with what any economist would think is right. The are on a good path on the monetary side, I hope so at least.
nickik 14y ago
> My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic crisis were a thing of the past. Keynsiansm thrown away for a reason. Just because we still dont know anything better is no reason to belive that keynsiansm is right. Thats like saying COBOL is the best language because we have figured out that Java is actually not that good. > Then reality happened, and it seems that US government spending has kept the economy going to the dogs. Not sure how you arrive at that. > . On the other hand, looking around in Europe, I don't manage to find a single country where austerity measures appear to have produced anything than deeper recession. Its kind of like saing look at these sinking ships fixing parts of the ship is really not working for them. I main sure you can not reduce goverment spending for some amount of time but not forever. Eventually people will not give you more money. Goverment spending is no solution in greece, anybody can see that, even keynsians, the only thing they want is to wait with buged cuts until the economy is stable but that is not always a option.

gadders 14y ago

The UK is hovering around the recession borderline, but I wouldn't say the recession is deeper than is was pre-austerity. On the other hand, Greece tried no austerity, and we see how that played out. //edit//And in the UK - austerity hasn't even started yet. Government spending is still rising in real terms.

mercurial 14y ago
Greece has particular problems. A culture of pork barrel, corruption, nepotism and tax evasion (not to mention cooking the books) does not make for sustainable governmental spending. But now that they are implementing unprecedented cuts, the country is going down the drain.
nickik 14y ago
The UK barly did any austerity and they raised taxes. What the UK does has nothing todo with what any economist would think is right. The are on a good path on the monetary side, I hope so at least.

nickik 14y ago

> My understanding is that it was widely discredited before the financial crisis, back when economists thought they actually understood economy and that economic crisis were a thing of the past. Keynsiansm thrown away for a reason. Just because we still dont know anything better is no reason to belive that keynsiansm is right. Thats like saying COBOL is the best language because we have figured out that Java is actually not that good. > Then reality happened, and it seems that US government spending has kept the economy going to the dogs. Not sure how you arrive at that. > . On the other hand, looking around in Europe, I don't manage to find a single country where austerity measures appear to have produced anything than deeper recession. Its kind of like saing look at these sinking ships fixing parts of the ship is really not working for them. I main sure you can not reduce goverment spending for some amount of time but not forever. Eventually people will not give you more money. Goverment spending is no solution in greece, anybody can see that, even keynsians, the only thing they want is to wait with buged cuts until the economy is stable but that is not always a option.