I would be interest in reports written by real economists on Keynse vs Hayak as it has been a few years since I read a nice review of the two philosophies in real life. The problem is one side frequently deliberately mischaracterizes the other side (like Chup just did) instead of actually dealing with what people actually say. Such is life though.
Run a deficit in the bad times, a surplus in the good. That's pretty standard economics. Too late now though, we don't control our own economy any more.
I'm hoping he was just deliberately being obtuse but you never know; he might really not understand such basic economics.
That is all well and good, but when you are in the hole you have to spend less than you are taking in to service the already existing debt. See to someone that has a job and contributes to society, this is a no brainer. So no Ireland was not a model of the type of economics that are espoused around here. The cuts werent deep enough even with higher taxation.
In a recession, raising taxes is liable to be counterproductive. If your debt is running out of control, you must cut spending. There really isn't any other way. Get ready for austerity, it's coming your way. And, to be certain, ours. Our leaders just haven't accepted it yet.
Awe fuck! Does this mean the Mick's are going to come flooding to America again like they did when they had that potato famine debaucle?
Just the economics one. Cut spending and forget to offer anything to stimulate the economy? Error. After all cutting public spending does not automatically lead to an improving economy. Tax breaks might but the UK isn't really doing that. If your tax revenues are 1 million a year and you've been spending 1.2 million, you could cut spending to 800,000 a year, watch the economy tank and your revenues fall to... substantially less than a million. So would that be a good idea? Might make us all feel good that we are 'tackling the deficit' but it's not necessarily smart.
To be fair, while that's all true, there is an additional factor going on here. Ireland has a relatively strong welfare state, especially with respect to unemployment benefits. When the economy tanks, government spending on projects is cut in response, and the economy then further tanks because of those cuts, the money spent on various aspects of the welfare state skyrockets. Ireland may have tried to cut spending in 2009, but it actually increased spending by over four billion euros (I don't, at a glance, find any 2010 estimates).
So what's to stop Ireland from saying, "you know what? Thanks for all that you've done for us, but fuck the EU. We out!" and walking. Disavow any debt based on the Euro and peg their new currancy to the Euro or the Dollar or the Yuan or something and calling it a day? I mean, the worst that happens is Ireland is bankrupt, which it is already. It isn't like Brussels will send EU troops to take Ireland back into the fold.
It's a plot by the Jews. None of Ireland's big banks are run by Jews, who own all the big banks in other European countries. Wait and see, by the time it's over all the main Irish banks will be Jew-controlled.
Am I your father? If yes then yes. If no then no. You can't have a deficit if you cut your spending below what you take in as revenue. If that means cutting back on everything then that's what you do. I also do not subscribe to the insane notion that governments can pump an economy. It never works. The government simply makes it harder to get things going. If Ireland wants to save itself then it needs to get rid of the shackles of government and let business run wild. The country will sort itself out. As long as the government clings to this nonsense that it can fix things nothing will get better in Ireland for a long time.
What if the economy was already too skewed towards the public sector? And then you slash it in half? In one go.
Are you (and others) not getting that that's already been done? "You didn't cut enough" is not a valid argument. If cutting by X makes the problem worse, then cutting by more than X is hardly going to solve it. We already have a low tax, low regulation economy where public spending is relatively low. If those things were the solution, there'd be no crisis in the first place.
It could happen. That (or some version of that) has been seriously proposed by some economists here and although it's still a fringe idea, these sorts of things have a way of gaining traction in a crisis.
I remember when Ireland was called "the celtic tiger state" in the press here a few years ago and was celebrated as a shiny example. What happened? Who is to blame? I need someone to blame! (I blame the EU in the meantime. It's always ok to blame the EU for everything.)
Okay, I have an idea! It sounds crazy but it just might work...... Islam is the new dance sensation sweeping the nation - Ireland is a small country - give Ireland to the Muslims as a "starter country" to practice for their big European takeover!
Sorry to burst your bubble, but the Chinese will buy Ireland before this could happen. They need room to expand.
The celtic tiger - in the last few years at least - was based on banks giving out loans to people who couldn't afford them in order to fuel a building boom. i.e. lax regulation in both the banking and building sectors.
^ Yep. Saw the ugly consequences of that housing bubble when I was travelling Ireland two years ago... pretty much every village seemed to have a bunch of ten to thirty absolutely identical looking houses standing around somewhere. A shame, especially considering how beautiful most of the older houses plus the landscape around them are.
Funny how all the libs are trying to make it sound like fiscal conservatives somehow link the health of the economy with government spending, and after they build that fallacy they go on to claim that cutting government spending isn't going to help the economy. Cutting government spending and balancing government budgets isn't about improving the economy. The idea of a free market economy is that it will take care of itself. The health of the economy isn't affected so much by how much government spends than by how much government meddles. Cutting spending is about restoring government to its rightful place- about preserving the value of currency, about living within its means. It's not about the economy or job creation. Government interference in the market has gotten us this cyclic boom-bust train that we've been on, and that's not going away. The economy will eventually recover on its own as long as the government (and in this case, the US government) doesn't collapse the entire system through attempting to monetize debt through currency manipulation, eventually resulting in hyperinflation.
That's certainly not the case here. We're not talking about the health of the economy. We're talking about the solvency of the state. Yup. It's entirely an ideological goal. This gives the lie to "there is no alternative" rhetoric we've been hearing.
