Austerity isn't really working is it?

V4Voluntary

steddyeddy wrote: »

I love when people talk about cutting welfare. They rarely realise it will have an effect on society at large and not just welfare recipients.

You know nothing about economics.

steddyeddy

V4Voluntary wrote: »

You know nothing about economics.

Attack the poster not the post but I'll humour you for the moment. What part of my post showed a lack of understanding of economics?

V4Voluntary

steddyeddy wrote: »

Attack the poster not the post but I'll humour you for the moment. What part of my post showed a lack of understanding of economics?

You were engaging in one of two topics, were you not. Those being either a) that the welfare recipient will have purchasing power to stimulate local business or b) that we can somehow lower crime with welfare.

Everyone sees the good consequences from welfare i.e - those that don't work have money to purchase goods and services. But the good economist acknowledges the unseen consequences that the majority miss i.e - that the money taken from productive individuals means that they will have less to spend. In other words, for every 1 Euro given to welfare recipients to create no capital, means that the individual the 1 Euro was taken from now has 1 Euro less to spend to transfer purchasing power to the tailor, the hairdresser, the butcher, the restauranteur. Society is now poorer.

Finally, you had no qualms about attacking posters.

Iwasfrozen

V4Voluntary wrote: »

You were engaging in one of two topics, were you not. Those being either a) that the welfare recipient will have purchasing power to stimulate local business or b) that we can somehow lower crime with welfare.

Everyone sees the good consequences from welfare i.e - those that don't work have money to purchase goods and services. But the good economist acknowledges the unseen consequences that the majority miss i.e - that the money taken from productive individuals means that they will have less to spend. In other words, for every 1 Euro given to welfare recipients to create no capital, means that the individual the 1 Euro was taken from now has 1 Euro less to spend to transfer purchasing power to the tailor, the hairdresser, the butcher, the restauranteur. Society is now poorer.

Finally, you had no qualms about attacking posters.

Well done you seem to know your keynesianism but you're forgetting from the economy's point of view it doesn't matter who spends the one euro. You mentioned hairdressers well poor people have hair too. And you're right social equality leads to lower crime rates.

V4Voluntary

Iwasfrozen wrote: »

Well done you seem to know your keynesianism but you're forgetting from the economy's point of view it doesn't matter who spends the one euro. You mentioned hairdressers well poor people have hair too. And you're right social equality leads to lower crime rates.

It does matter to the economy who gets to spend the one euro.

A couple of things I want to highlight:

1) Government creates nothing. It generates no wealth itself. It only lives on what it can take from the private sector. Fairly straight forward. But by taking from the private sector, it re-arranges supply and demand. The butcher that has his window broken must transfer purchasing power to the glazier whereas the tailor that would have obtained this purchasing power, loses out. The same with government claiming to create 500 new jobs by building a bridge will transfer capital and labour to building a bridge that would have otherwise been placed in other industries. The other industries lose out and only the larger industries in the specific categories remain while the smaller ones go out of business.

2) If you tax people who work to pay those that don't, you kill the incentive to produce as there will be no further reward or opportunity for expansion. The idle produce no capital in an economy, thus the economy is not as vibrant as it could be. The idle become a leech sucking the blood out of it's host. The host will eventually die but in the meantime, it is not living at the greatest health it should be, more like limping along. The economy becomes smaller, not bigger.

3) It matters who gets to spend that euro because it raises the living standards of those that the money should have been directed to in the first place. Society is now poorer because those that don't work have less incentive to obtain gainful employment to enter the market with something to offer. In other words, you're saying "this is fine". Whereas, an unemployed individual would enter employment for a businessman (currently giving him something for doing nothing) exchanging purchasing power for his labour if he didn't receive welfare. The economy in this instance grows. More capital is accumulated.

The problem of welfare brings up many difficulties. Not least because it makes others currently in employment, unemployed. It re-directs money away from growing industries and places them elsewhere. Those industries suffer. People lose their jobs. They can't grow.

I'm not a supporter of legislation calling for social equality enforced by government. I believe in individual rights. I don't believe in hand-outs both on a moral ground and an economic one. I'm also not a Keynesian. I'm an Austrian.

HerrScheisse

V4Voluntary wrote: »

It does matter to the economy who gets to spend the one euro.

A couple of things I want to highlight:

1) Government creates nothing. It generates no wealth itself. It only lives on what it can take from the private sector.

Well that is tosh right there. Agreed a government does not create wealth directly through own enterprise but it certainly has the power to stimulate and you will agree, this leads to wealth creation if the conditions are favorable.

So by effect, the government through low corporate taxes, incentives, subsidies, low interest rates, does create wealth whether you are an Austrian or a Keynesian.

HerrScheisse

V4Voluntary wrote: »

It does matter to the economy who gets to spend the one euro.

A couple of things I want to highlight:


2) If you tax people who work to pay those that don't, you kill the incentive to produce as there will be no further reward or opportunity for expansion. The idle produce no capital in an economy, thus the economy is not as vibrant as it could be. The idle become a leech sucking the blood out of it's host. The host will eventually die but in the meantime, it is not living at the greatest health it should be, more like limping along. The economy becomes smaller, not bigger.

This point is a joke right? You subscribe to economic Darwinism? And what of the people that lost employment through the fraudulent activities of banking consortiums? Do you propose that 25% of Spanish youth, although educated, are "nutteloze essers"?

Anynama141

HerrScheisse wrote: »

This point is a joke right? And the people that lost employment through the fraudulent activities of banking consortiums? Do you propose that 25% of Spanish youth, although educated, are "nutteloze essers"?

The big problem in Spain is that their labour market is a terrible mess - it's almost impossible to fire somebody, which makes it almost impossible to hire anyone.

HerrScheisse

Possibly. Every society has issues with hiring and firing. That is a question of regulation and administrative rules. But with the inhuman attitudes previously described, will lead to a brute society. Touché sir if you are a troll, and that is from someone happy to speculate on economic rise and fall through stocks, but I would never, ever agree with your black and white "theory".

Anynama141

HerrScheisse wrote: »

Possibly. Every society has issues with hiring and firing. That is a question of regulation and administrative rules. But with the inhuman attitudes previously described, will lead to a brute society. Touché sir if you are a troll, and that is from someone happy to speculate on economic rise and fall through stocks, but I would never, ever agree with your black and white "theory".

I think you have me confused with someone else. Where are you going with your 'inhuman' 'brute society'? Are higher levels of employment a bad thing now?

HerrScheisse

Apologies! Your post made perfect sense.

I refer to the chap beforehand!

V4Voluntary

HerrScheisse wrote: »

Well that is tosh right there. Agreed a government does not create wealth directly through own enterprise but it certainly has the power to stimulate and you will agree, this leads to wealth creation if the conditions are favorable.

So by effect, the government through low corporate taxes, incentives, subsidies, low interest rates, does create wealth whether you are an Austrian or a Keynesian.

Government help the economy with low taxes and by creating an incentive i.e - again, low taxes. But government do nothing when they subsidise. I'm against subsidies. Interest rates should be determined by the market, not government. Government create nothing and they don't have the power to stimulate, only destroy.

HerrScheisse wrote: »

This point is a joke right? You subscribe to economic Darwinism? And what of the people that lost employment through the fraudulent activities of banking consortiums? Do you propose that 25% of Spanish youth, although educated, are "nutteloze essers"?

Would these be the exact same banking consortiums protected by your oh so beloved government? :rolleyes:

There is nothing Darwinian about voluntary trade. There is, however, something wholly draconian about taking from productive individuals and giving it to unproductive individuals.

steddyeddy

V4Voluntary wrote: »

You were engaging in one of two topics, were you not. Those being either a) that the welfare recipient will have purchasing power to stimulate local business or b) that we can somehow lower crime with welfare.

Everyone sees the good consequences from welfare i.e - those that don't work have money to purchase goods and services. But the good economist acknowledges the unseen consequences that the majority miss i.e - that the money taken from productive individuals means that they will have less to spend. In other words, for every 1 Euro given to welfare recipients to create no capital, means that the individual the 1 Euro was taken from now has 1 Euro less to spend to transfer purchasing power to the tailor, the hairdresser, the butcher, the restauranteur. Society is now poorer.

Finally, you had no qualms about attacking posters.

First of all I think that some people are getting to much welfare but people like that aren't as numerous as people think.

Social welfare from my point of view should be enough to provide a chance of social mobility.

Anyway my point about welfare wasn't related to economics but microbiology and societal health. Look at what happened when welfare was last dramatically reduced in the states.

Suryavarman

HerrScheisse wrote: »

Well that is tosh right there. Agreed a government does not create wealth directly through own enterprise but it certainly has the power to stimulate and you will agree, this leads to wealth creation if the conditions are favorable.

Government attempts at stimulus just result in unsustainable bubbles or straight out waste.

So by effect, the government through low corporate taxes

Corporate taxes by their very nature, retard the creation of wealth. Without corporate taxes there would be more money to to invest in private enterprise. Low corporate taxes just reduce the negative effects of that tax, they don't have any positive impact.

incentives

Government incentives only detrimentally distort behaviour.

subsidies

Subsidies only benefit bad ventures that cannot operate at a level of efficiency required by the market. Subsidies hold back innovation by reducing incentives to improve products.

low interest rates

Low interest rates create bubbles which inevitably lead to recessions.

does create wealth whether you are an Austrian or a Keynesian.

Wealth for a lucky few special interests at the expense of the many.

KyussBishop

Lets bring these Austrian views to their conclusion, instead of that being eked out over many posts:
The arguments used, are for the purpose of getting to the goals of 1: Ending social welfare, 2: Killing the power of labour and slashing their wages, 3: Privatizing almost everything provided for publicly, 4: Deregulating most things, to make actions that are currently illegal (usually fraud), become legal.

The arguments provided aren't concerned with being economically accurate, but on spinning a narrative to try and justify the above, without stating it outright.

That's not a society people will want (certainly not more than a tiny minority), and it's not altogether difficult to start finding massive contradictions/inconsistencies/faults in it.


In order for these anti-state views (basically anything complaining about taxes) to remain consistent, they have to be pushed pretty much all the way to anarcho-capitalism, which isn't very defensible.
So, what happens instead, is supporters don't ever seem to be interested in resolving or explaining such inconsistencies, but they still compromise on them for sake of practicality (they'll avoid stating this though).

However, this doesn't stop them pretending this unattainable (or just downright undesirable) anarcho-capitalist scenario, is their end goal, and thus this is what they base their moral arguments and rhetoric on;
but, as soon as they compromise and settle for anything less than full-on anarcho-capitalism, that invalidates the base for almost all of their anti-government arguments/rhetoric, yet they still use them.


The position they do finally end up in, is a big compromise where they say steps towards anarcho-capitalism (some of them in points 1-4 at the top) are better than nothing, even though the arguments they use to justify that are inconsistent because they are based on an unattainable goal.

The bastardized compromise they end up in, usually becomes devoid of its superficial moral principles, and the end-results of implementing the compromise look a lot like:
"Let workers go without welfare, living wages and public services, and set all the conditions in place for economically/politically powerful people, to trample all over them"

The arguments defending against that, usually all switch back to the unattainable/undesirable anarcho-capitalist system, when the actual set of compromise policies, doesn't get anywhere near that.

Three Seasons

KyussBishop wrote: »

Lets bring these Austrian views to their conclusion, instead of that being eked out over many posts:
The arguments used, are for the purpose of getting to the goals of 1: Ending social welfare, 2: Killing the power of labour and slashing their wages, 3: Privatizing almost everything provided for publicly, 4: Deregulating most things, to make actions that are currently illegal (usually fraud), become legal.

The arguments provided aren't concerned with being economically accurate, but on spinning a narrative to try and justify the above, without stating it outright.

That's not a society people will want (certainly not more than a tiny minority), and it's not altogether difficult to start finding massive contradictions/inconsistencies/faults in it.


In order for these anti-state views (basically anything complaining about taxes) to remain consistent, they have to be pushed pretty much all the way to anarcho-capitalism, which isn't very defensible.
So, what happens instead, is supporters don't ever seem to be interested in resolving or explaining such inconsistencies, but they still compromise on them for sake of practicality (they'll avoid stating this though).

However, this doesn't stop them pretending this unattainable (or just downright undesirable) anarcho-capitalist scenario, is their end goal, and thus this is what they base their moral arguments and rhetoric on;
but, as soon as they compromise and settle for anything less than full-on anarcho-capitalism, that invalidates the base for almost all of their anti-government arguments/rhetoric, yet they still use them.


The position they do finally end up in, is a big compromise where they say steps towards anarcho-capitalism (some of them in points 1-4 at the top) are better than nothing, even though the arguments they use to justify that are inconsistent because they are based on an unattainable goal.

The bastardized compromise they end up in, usually becomes devoid of its superficial moral principles, and the end-results of implementing the compromise look a lot like:
"Let workers go without welfare, living wages and public services, and set all the conditions in place for economically/politically powerful people, to trample all over them"

The arguments defending against that, usually all switch back to the unattainable/undesirable anarcho-capitalist system, when the actual set of compromise policies, doesn't get anywhere near that.

Do you believe someon with capitalist views has those views out of selfishness?

Cookie_Monster

Is austerity working?
It's hard to tell since there has been little or none to date in Ireland.
If there was actual attempts are proper spending reduction then you might see actual impacts working and savings but a couple of % here and there is meaningless in the bigger picture

Cookie_Monster

Cookie_Monster wrote: »

Is austerity working?
It's hard to tell since there has been little or none to date in Ireland.
If there was actual attempts are proper spending reduction then you might see actual impacts working and savings but a couple of % here and there is meaningless in the bigger picture

What Ireland experienced has been an end of (unsustainable) growth rather than real austerity, I would not be surprised to see austerity loom on the horizon when the next bailout is needed.

Now that Cyprus has been "dealt with" it's very likely that future bailouts will follow a similar model. Real austerity will happen when the welfare state is dismantled to repay the bailout loans!

KyussBishop

Three Seasons wrote: »

Do you believe someon with capitalist views has those views out of selfishness?

No; I support a mixed capitalist/socialist/(left-)libertarian system myself; the socialist vs capitalist divide is, in my view, a false dichotomy, since every western country is already a mixed capitalist/socialist system (with welfare/public-services being very 'socialist').

It is the type of anti-state Austrian-based views, which do not seem possible to practically implement without fatally compromising its own rhetoric/moral-justifications, that I take issue with; justification for implementing certain policies in our current system, is based upon idealizing their unattainable perfect political/economic system, even though implementing those policies piecemeal in the current system, just allows the economically/politically powerful, to trample over labour and people who are not well off.

Piliger

Anynama141 wrote: »

The big problem in Spain is that their labour market is a terrible mess - it's almost impossible to fire somebody, which makes it almost impossible to hire anyone.

Similar problem has hampered the French economy for decades. It makes starting new businesses, or expanding a business, a major risk for anyone who wants to do so.

stretchdoe

Is austerity working well?

Depends on who you ask.

Is it working well for those it's supposed to work well for: i.e., the banks and those who would stand to lose everything if the the whole 'privatise profit, socialise debt' cartel was interfered with?

Yep, it's working beautifully for them; they're actually profiting handsomely/their wealth is exploding, due to the decisions of the politicians they have in their pockets.

Is it working for the 'economies' of EU countries, or people in general?

Of course not, but that's not the point, is it..

As long as the 'right' people are profiting and it isn't being pushed 'too far', then that's all that matters.

They just have to skirt the precipice, make sure they're sure-footed and don't get it wrong/go over.

It's a risky game, though; if misjudged there could be a high price to pay for some/all hell could break loose.

pH

stretchdoe wrote: »

Is austerity working well?

Depends on who you ask.

Is it working well for those it's supposed to work well for: i.e., the banks and those who would stand to lose everything if the the whole 'privatise profit, socialise debt' cartel was interfered with?

Yep, it's working beautifully for them; they're actually profiting handsomely/their wealth is exploding, due to the decisions of the politicians they have in their pockets.

Is it working for the 'economies' of EU countries, or people in general?

Of course not, but that's not the point, is it..

As long as the 'right' people are profiting and it isn't being pushed 'too far', then that's all that matters.

They just have to skirt the precipice, make sure they're sure-footed and don't get it wrong/go over.

It's a risky game, though; if misjudged there could be a high price to pay for some/all hell could break loose.

This is just pointless rhetoric -

The bank's debt was guaranteed by a state decision by an elected FF government. It was a awful decision, but it's done, and looking at recent polls/bi-election results the population has a short memory and is close to being ready for more of the same.

The shareholders of the banks (the owners) lost everything - the people that actually were bailed out (those who lost nothing) were foreign bond holders - those who had lent money to the Irish banks.

There is an awful lot wrong with financial services (on a global scale) they take everyone's money as deposits/pension funds/investment funds/insurance and use it to make a little for the person whose money they have and a lot for themselves. That's for us to change though by ceasing to allow our money be used to make other people rich.

The point remains our austerity isn't austerity at all - we're overspending 15 billion euro this year on things like social welfare, health and education. Nothing in your post even hints at an alternative to our current situation - even if we could somehow get another 5 billion in borrowing this year so we didn't need the cuts - even if there were people out there mad enough to lend it to us - we'd be incurring a crippling and unsustainable level of debt - meaning utter ruin would be just a few years away.

Anynama141

stretchdoe wrote: »

Yep, it's working beautifully for them; they're actually profiting handsomely/their wealth is exploding, due to the decisions of the politicians they have in their pockets.

Can you tell us how much profit the Irish banks have made in the last few years?

Can you tell us how the share prices of the Irish banks compare to what they were 'pre-austerity'?

Would you like to revise your view based on these numbers?

Anynama141

pH wrote: »

The shareholders of the banks (the owners) lost everything - the people that actually were bailed out (those who lost nothing) were foreign bond holders - those who had lent money to the Irish banks.

As you probably know, most of these bonds would have been held as pension investments in ordinary managed pension funds, rather than by rich billionaires cackling at the downtrodden proles.

token101

Anynama141 wrote: »

As you probably know, most of these bonds would have been held as pension investments in ordinary managed pension funds, rather than by rich billionaires cackling at the downtrodden proles.

Exactly. That's the big thing that people don't ever care about. The minute you "burn the bondholders", yeah you'll ruin a billionaire or two but you'll **** an awful lot of pension funds that people have worked their entire lives for, and if I'm honest I'd rather see people get their over-inflated dole cut than see an Enron type situation repeat itself on a worldwide scale. I genuinely think the government haven't done a particularly bad job, they were dealt a **** hand and have managed to somewhat steady the ship but what's really needed is a proper reform. Implementing the Basel III standards would be a start.