Not totally surprising, though I would argue the corollary is that stimulus may hurt/help in different ways at different times. :oQuote:
Originally Posted by wiggin
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Not totally surprising, though I would argue the corollary is that stimulus may hurt/help in different ways at different times. :oQuote:
Originally Posted by wiggin
100% agreed. Fiscal stimulus during times of high rates and decent growth is probably counterproductive. I don't think the conclusions are surprising, but the quantification (and the estimated multipliers) was illuminating.Quote:
Originally Posted by Dreadnaught
They're citing NBER working papers, which are not peer-reviewed (2 of them over 2 years old, more than enough time to get them accepted in a journal). Are we led to believe that there have been no published articles on the same topic? It's not very hard to find a handful of working papers that say whatever you want them to say.Quote:
Originally Posted by wiggin
It also doesn't help that the paper that goes against their thesis is by Alesina, who's a pretty famous economist...
The articles were later published as real papers. For example, the Auerbach paper was published this year in the American Economic Journal. The Christiano paper was published in the Journal of Political Economy in 2011. Free Exchange normally cites the NBER working papers, possibly because they have access to NBER but not to a large library.
I'm also not sure that Alesina really disagrees.
Regardless, the point isn't that Free Exchange supports fiscal easing during certain recessions - we know they do, and it's not surprising that they would publish a column with supporting evidence. The point is that fiscal multipliers are very tricky to sort out, and there are both logical and mathematical reasons to suggest that in certain circumstances (e.g. at the zero bound on interest rates, low growth) that austerity can be less beneficial (or even harmful) than in other circumstances. The specific numbers and magnitude of the effect are open to discussion, of course.
My point is it's incredibly sloppy journalism (at best) by the Economist to be citing only old working papers. At worst, it looks like an attempt to justify their preexisting views with some third-tier scholarship.
It's all right, the papers have been published nowQuote:
Originally Posted by Loki
Which doesn't change my point about the Economist being incredibly sloppy or self-serving in its research.Quote:
Originally Posted by Aimless
That is pure gobbledygook spambot.
See my comment in the other thread. :o
Is Austerity working for Spain?
Would it be self-serving "shoddy" third tier scholarship if The Economist declared it a resounding success...OR failure? :rolleyes:
What does "austerity" mean when a country can't actually borrow money? Is Gaza under an austerity budget? :bored:
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Originally Posted by Loki
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Originally Posted by Loki
Why don't you tell us, professor.Quote:
Originally Posted by Loki
Rand, since you started this thread....why don't you tell us how Austerity has been working where you live? Begin by explaining what Austerity means....compared to what it means to other nations. Also, define "entitlements" and distinguish them from "welfare".
Has the UK decided to end its NHS, or slash its funding? Not that I can see. Not even Saint Thatcher would have proposed cutting NHS first, and finding other cuts or savings elsewhere. She was a staunch supporter of your NHS, but happened to find an international friend in Saint Reagan...who'd never propose cutting US national defense first.
Strange bed fellows, huh. Brits get to keep their NHS, spend less on their military or national defense, in order to give their citizens universal health care. As long as the US helps "subsidize" the military effort, monitor international seas, fight piracy or international terrorists of all kinds, it's all good...an even exchange....regardless of what US citizens get in return? :rolleyes:
A few distinct issues there.
1: Biggest issue that affected me personally regarding austerity was the rise in VAT (Sales Tax).
2: The major difference between austerity in the UK and austerity in other nations, is that we've implemented it optionally. We've not waited until it was compelled. That means that its far less draconian than in other nations which are having it forced on them, since we're paying low amounts on interest.
3: No we're not ending the NHS or any major programs. Or the military.
The way its being implemented here are pretty much across the board cuts, weighted based on how they can be implemented. Yes the military budget has some fat that can be cut back (we're drawing down our military engagements afterall), but we'll still have one of the foremost military capabilities besides our ally America. The military cuts are below average. The military cuts are also not predicated on the notion that the US won't cut or will "pick up the slack", I would support equivalent savings in the American fat too. Probably again below the average rate of savings needed though.
No, the NHS is not directly being cut. But it is being frozen in real terms and in medicine nowadays with an ageing population and ever increasing drug costs that is essentially equivalent to a cut. Increasing spending by inflation may be a nominal freeze, but when the costs are rising faster than inflation then cuts need to be found in reality there too. How much is the US increasing annually both its public and private medical costs? Imagine it being frozen.
The basic way that its being done is by tackling everything you can. Many unpopular decisions, but tackling everything you can in every department rather than expecting any one area to bear all the burden. Oh and a public sector nominal pay-freeze that's lasted about three years already to bring real wages down.
Freezing spending in medicine and capping drug costs (a political hotbed of contention there, since it involves reimbursing US pharmaceuticals less, and means some "price fixing") is still rather vague.
What's being CUT -- is it on the service end or provider side? Do your NHS physicians/nurses have longer work hours (at same pay), or delayed retirement age with less in pensions? Do your 'pensioners' living in nursing homes have fewer caretakers, or is it harder to qualify for that kind of care?
Are there CUTS in public transit funding, or CUTS to upgrading/maintaining infrastructure? What are the CUTS being made to pubic Education? It's not really Austerity to add a VAT tax and freeze spending in every department, or freeze public wages.
I'm struggling to understand what you're getting at. You seem to be after some sort of "slash and burn" where the entire departments etc are abolished.
Why is it not austerity to have tax rises and spending cuts? That is precisely the point: There is waste to be found in every department. By telling each department chief, who tells their sub-departments and so on that they've now only got a budget 80% what it was then they should be able to identify the least important 10-20% and cut that away. Its called efficiency.
Perhaps this is an article you'll find interesting? While it is being attempted not to cut front-line teachers etc (though they have fallen under the 3 year pay freeze) the Department for Education has had a 50% cut to its Administration budget. Today as part of that cut it has been revealed that 1,000 staff are to be laid off (a quarter of the department) and it'll be going from 12 regional offices to just 6: http://www.bbc.co.uk/news/education-20324346
"Austerity" IS more like slash and burn, and abolishing entire departments, though. "Austerity" is making deep cuts, taking drastic or austere measures -- more like what was expected from Greece. Cutting waste or duplications are efficiency efforts, adding a VAT tax is increasing revenue....things every nation should have been doing to balance budgets anyway, over time and in moderation. Since many didn't, and the $$ signs of debt/deficit have finally rung an alarm bell, there are a couple of decades' worth of catch-up to be done now, but I wouldn't call that "Austerity".Quote:
Originally Posted by RandBlade
Thanks. It also says there's a concern about teacher-to-student ratios, quality of education, and cuts to IT that needs to be explained to parents. It's logical to reduce red tape or administrative overhang, cut some HR personnel or have fewer janitors. But no one wants the physical buildings to decay, or cram a bunch of students into over-crowded classes with too few teachers, and even fewer computers or learning labs.Quote:
Perhaps this is an article you'll find interesting? While it is being attempted not to cut front-line teachers etc (though they have fallen under the 3 year pay freeze) the Department for Education has had a 50% cut to its Administration budget. Today as part of that cut it has been revealed that 1,000 staff are to be laid off (a quarter of the department) and it'll be going from 12 regional offices to just 6: http://www.bbc.co.uk/news/education-20324346
From what you've posted here, the UK has a real problem with truancy, delinquents and drop-outs, contributing to your "Chav" population...adding to other social problems and a need for other government spending. Cutting all spending equally, 10-20% right off the top of every department, doesn't sound very efficient after all. How is the UK planning to address those problems in the near-term, let alone the long-term?
The Krugmans of the world are calling slower than average increases in spending "austerity", so I don't know why you're picking on yet another strawman.
I've asked Rand some direct questions. He can answer for himself. You have no reason to keep "picking" on me, which is your own strawman, Loki. :bored:Quote:
Originally Posted by Loki