Anti-austerity protests in London - Printable Version

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Anti-austerity protests in London - The Beast1 - 10-07-2015

Is this for real? People who have come to expect free hand outs from the government get mad when the money runs out?

http://www.mirror.co.uk/news/uk-news/ant...an-5918562

Quote:Quote:

As a quarter of a million people descend on central London today to protest against the Tory's savage cuts, one campaigner has created hilarious Mean Girl-inspired placards to carry with her.

Quarter million eh? After the lack of anti immigration protesting coverage I doubt it was that many people. Not to mention mean girl signs.

Article also has a video of Russel Brand hanging out with the protesters. What right does he think he has being there? What a fucking tool.

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Anti-austerity protests in London - Ryre - 10-07-2015

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

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Anti-austerity protests in London - Phoenix - 10-07-2015

Quote: (10-07-2015 10:49 AM)The Beast1 Wrote:  

Is this for real? People who have come to expect free hand outs from the government get mad when the money runs out?

Of course dude. It's not "charity". They're "entitled to it".

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Anti-austerity protests in London - The Beast1 - 10-07-2015

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

It's called the broken window fallacy.

A boy goes and breaks a window with a ball. The homeowner then has to go to a window shop where a gent makes a window. That window came from silica and came elsewhere further down the line employing a small army of people to make that final product.

Is the broken window bad for the economy? No! However, it robs the home owner of money to do something else instead of fixing that window. Argument also works well for prison spending and small towns which are entirely supported by the prison.

Prison spending is the same way and so is welfare. I would rather be spending my money on investments and making a small business which would create more wealth than taking my money and handing it directly to the poor robbing me of the opportunity to spend my money where I please.

So yes, it does cause a downturn but that is the withdrawal effect of removing malinvestment. Give it time and the market will self correct itself.

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Anti-austerity protests in London - Phoenix - 10-07-2015

Quote: (10-07-2015 11:28 AM)The Beast1 Wrote:  

It's called the broken window fallacy.

I love the broken window fallacy, it's my favourite

What I most like to do when it comes up is the following:
Me: Damage caused by war and disasters doesn't improve the economy
Drones: Pfftt what are you talking about? Of course it does! Everyone knows that! The rebuilding causes huge economic growth!
Me: So the economy is pretty bad at the moment in Country X, right?
Drones: Yeah it's pretty bad there...
Me: And the president there wants the economy to improve, right?
Drones: Yeah probably...
Me: So he should just politely request that the residents of the 5 largest cities in his country evacuate, check they've all evacuated, and then bomb the living shit out of those cities for one week straight. Those cities will then need to be rebuilt. This rebuilding will then cause a huge increase in economic activity. Problem solved right?

Drones:
Me:

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Anti-austerity protests in London - WildBoar - 10-07-2015

They are just having a party! Bloody hippies!

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Anti-austerity protests in London - NO_LIMIT_CRACKA - 10-07-2015

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 11:28 AM)The Beast1 Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

It's called the broken window fallacy.

A boy goes and breaks a window with a ball. The homeowner then has to go to a window shop where a gent makes a window. That window came from silica and came elsewhere further down the line employing a small army of people to make that final product.

Is the broken window bad for the economy? No! However, it robs the home owner of money to do something else instead of fixing that window. Argument also works well for prison spending and small towns which are entirely supported by the prison.

Prison spending is the same way and so is welfare. I would rather be spending my money on investments and making a small business which would create more wealth than taking my money and handing it directly to the poor robbing me of the opportunity to spend my money where I please.

So yes, it does cause a downturn but that is the withdrawal effect of removing malinvestment. Give it time and the market will self correct itself.

How is government spending and the national economy as a whole like and unlike one homeowner fixing a broken window? Explain your answer.

Intuitive metaphors like "we must tighten our belts" break down when applied to macroeconomics. If you run into hard times cutting spending and stashing money in your mattress makes sense. But if everyone cuts spending and stashes money in their mattresses the economy comes to a screeching halt.

Besides, who said anything about deliberately destroying things, e.g. breaking windows? If Britain is anything like the U.S. it has a lot of infrastructure needs. The government can spend, building roads and bridges that we need and also making up for the temporary fall in demand, 'priming the pump' and getting the economy moving again. At the end of your example all we have is the same window we started with. At the end of mine we have a bunch of roads and bridges we didn't have before.

The real-life record of austerity in times of recession is terrible. Britain, and Europe in general, have pursued much more austerity than the U.S. since 2008 and have had much slower economic growth.

The real world is complicated and counterintuitive, not always susceptible to explanation by simplified metaphor.

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

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Anti-austerity protests in London - Phoenix - 10-07-2015

Quote: (10-07-2015 12:17 PM)Ryre Wrote:  

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

They should. That way they'll only know how to fuck up the country's gas stations and leave everyone else unscathed.

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Anti-austerity protests in London - britchard - 10-07-2015

Quote: (10-07-2015 12:17 PM)Ryre Wrote:  

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

Ryre, I completely disagree with you, but I can see what you mean. Obviously curbing spending means that recovery is slower, but if you carry on spending money that you don't have, then you will just have another recession very quickly, and inflation will occur.

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Anti-austerity protests in London - Fast Eddie - 10-07-2015

Quote: (10-07-2015 12:17 PM)Ryre Wrote:  

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

Do you follow dating advice provided by 60 year old phds in behavioral science or is this deferral to experts only applicable to stuff that doesn't impact you personally?

By the way, what are the odds that thousands of leftist turned up to demonstrate because they were just so displeased at the sub-optimal nature of the government's handling of the economy? I mean, if there is one thing that gets hippie worked up it's the finer points of economic policy, right?

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 12:33 PM)britchard Wrote:  

Quote: (10-07-2015 12:17 PM)Ryre Wrote:  

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

Ryre, I completely disagree with you, but I can see what you mean. Obviously curbing spending means that recovery is slower, but if you carry on spending money that you don't have, then you will just have another recession very quickly, and inflation will occur.

1) a slower recovery is a big deal. Let's say as a result of austerity policies the economy grows at 1% for the first three years after a recession before attaining a stable growth rate of 3%, while with expansionary policies it would have gone to 3% immediately (unrealistic, but for simplicity's sake). That means the economy is 6% below where it could be (a little more actually due to compound interest). 6% not just for one year, but year after year after year.

2) People keep predicting inflation, it keeps not happening.

3) Some inflation is good for the economy. Think about it this way: as soon as inflation slips below 0% (i.e. into deflation), it becomes advantageous to stash money in your mattress, because it will literally be worth more tomorrow than today. So people stop spending, which causes less growth, more deflation, which causes even less spending, and you are in a deflationary spiral. Very bad news.

So you want to keep inflation, not just at 1% or 2%, but at a level that gives you a bit of a safety margin over that 0% mark--say 3 or 4%. Historically the U.S. has had very healthy grown with inflation at that level.

Say we are in a recession with very low inflation/borderline deflation, as we were quite recently. You would say, we should not do any expansionary spending, even at the risk of a slow recovery (and loss of trillions in production) because of the risk of inflation. I say do some expansionary spending, let inflation creep up to that healthy level of 3-4%, then cut back. Why is your view better? Why is it trillions in lost production better?

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 12:41 PM)Fast Eddie Wrote:  

Quote: (10-07-2015 12:17 PM)Ryre Wrote:  

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

Yes. If nothing in economics was complex or counterintuitive we wouldn't have college courses on it, we could let gas station attendants plan national economic policy.

Do you follow dating advice provided by 60 year old bulldykes with phds in behavioral science or is this deferral to experts only applicable to stuff that doesn't impact you personally?

By the way, what are the odds that thousands of leftist phaglets turned up to demonstrate because they were just so displeased at the sub-optimal nature of the government's handling of the economy? I mean, if there is one thing that gets hippie fags worked up it's the finer points of economic policy, right?

What makes you think the economy doesn't affect me personally?

I'll ask you and Britchard the same questions.

"Reducing your spending..... when you don't have that money to spend..... is bad for recovery?


1) What does "don't have that money to spend" mean when applied to a national government? Obviously a government that truly does not have money to spend can't spend it, so taken literally your question is a tautology. What you mean is "The government should neither deficit spend nor expand the money supply in times of recession." Are you prepared to demonstrate mathematically that the costs to GDP of leaving a lot of people out of work and productive capacity unused are less than whatever costs might be incurred by expansionary fiscal and monetary policy?

2) As long as we are in simplified-metaphor-land, suppose you are broke and out of work. You get a great job offer. But to take the job you need a new suit and a subway pass. You have a credit card. Do you "spend money that you don't have" by buying that suit and subway card on credit, or do you "reduce spending" and sit home picking lint out of your navel?

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Anti-austerity protests in London - The Beast1 - 10-07-2015

Quote: (10-07-2015 12:14 PM)Ryre Wrote:  

Quote: (10-07-2015 11:28 AM)The Beast1 Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

It's called the broken window fallacy.

A boy goes and breaks a window with a ball. The homeowner then has to go to a window shop where a gent makes a window. That window came from silica and came elsewhere further down the line employing a small army of people to make that final product.

Is the broken window bad for the economy? No! However, it robs the home owner of money to do something else instead of fixing that window. Argument also works well for prison spending and small towns which are entirely supported by the prison.

Prison spending is the same way and so is welfare. I would rather be spending my money on investments and making a small business which would create more wealth than taking my money and handing it directly to the poor robbing me of the opportunity to spend my money where I please.

So yes, it does cause a downturn but that is the withdrawal effect of removing malinvestment. Give it time and the market will self correct itself.

How is government spending and the national economy as a whole like and unlike one homeowner fixing a broken window? Explain your answer.

Intuitive metaphors like "we must tighten our belts" break down when applied to macroeconomics. If you run into hard times cutting spending and stashing money in your mattress makes sense. But if everyone cuts spending and stashes money in their mattresses the economy comes to a screeching halt.

Besides, who said anything about deliberately destroying things, e.g. breaking windows? If Britain is anything like the U.S. it has a lot of infrastructure needs. The government can spend, building roads and bridges that we need and also making up for the temporary fall in demand, 'priming the pump' and getting the economy moving again. At the end of your example all we have is the same window we started with. At the end of mine we have a bunch of roads and bridges we didn't have before.

The real-life record of austerity in times of recession is terrible. Britain, and Europe in general, have pursued much more austerity than the U.S. since 2008 and have had much slower economic growth.

The real world is complicated and counterintuitive, not always susceptible to explanation by simplified metaphor.

Ok let me change the examples around since you're having trouble.

Country A creates a bunch of laws that make its citizens automatic criminals for petty offenses. This in turn creates prisons which are put into small towns. The prisons employ people from these small towns and also buy goods produced locally such as food. The prison using tax dollars from the penal system pays locally into the economy making jobs.

However, do you or I want to pay extra taxes for jailing people for petty nonviolent offenses like talking back to a cop or smoking marijuana? I pay more in taxes when I'd rather use my money for investment into a small business. I'm still forced by wealth redistribution to pay into something that doesn't help humanity.

Another example:
Replace prisons with military. Oh now you want to spend trillions on a jet plane that can also VTOL all over the place. The trillions of cash came from tax money and get spent at defense contractors hiring engineers who then mass produce the jets with thousands of workers. These workers then spend their money elsewhere fueling the local economy.

Those jets then go on to blow up a ton breaking windows.

Another example:
The government starts taxing for welfare which then necessitates a social worker agency to manage who gets the money. This agency skims off the tax money to pay people to process applications. An unemployed single mother goes in and signs up for benefits. She makes enough money to live in a nice 3 bedroom house, get covered healthcare for her children, food, and spending cash at the end of the month. All for doing nothing. She doesn't work at all because she doesn't have to, but the welfare money that came from taxes goes into the local economy.

What happens when you eliminate the money spent on the prison, jet planes, and welfare? The people making a living from them end up unemployed womp womp causing short term hurt.

However, my tax liability has decreased. Now I am able save and soon enough, I have enough money to open my own business where I employ one former prison guard, an engineer, a ton of assembly line workers, and a secretary formally on government dole to help create glass widgets that people want to buy.

Now, my glass widgets don't kill or imprison people they make beautiful decorations for people's living rooms making them happier and an unemployed single mom has a job and is able to set a good example for her fatherless son by staying gainfully employed.

They key factor here is does it add or detract from the human experience? I'd argue that prisons and fighter jets are way worse than welfare, but when you have generations of people on welfare is it really helping society?

Do you see how it works now?

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Anti-austerity protests in London - Captainstabbin - 10-07-2015

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

You know what else is good for a recovery? When parasites are forced to find any job - even if they think it's beneath them - just to survive.

Allowing immigration, supporting huge bureaucracies, government intrusiveness - most of that liberal crap goes away when people are doing back-breaking work for every meal.

Just look at these people - they're all SOOO happy to be living off the hard work of others.

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 01:08 PM)The Beast1 Wrote:  

Quote: (10-07-2015 12:14 PM)Ryre Wrote:  

Quote: (10-07-2015 11:28 AM)The Beast1 Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

It's called the broken window fallacy.

A boy goes and breaks a window with a ball. The homeowner then has to go to a window shop where a gent makes a window. That window came from silica and came elsewhere further down the line employing a small army of people to make that final product.

Is the broken window bad for the economy? No! However, it robs the home owner of money to do something else instead of fixing that window. Argument also works well for prison spending and small towns which are entirely supported by the prison.

Prison spending is the same way and so is welfare. I would rather be spending my money on investments and making a small business which would create more wealth than taking my money and handing it directly to the poor robbing me of the opportunity to spend my money where I please.

So yes, it does cause a downturn but that is the withdrawal effect of removing malinvestment. Give it time and the market will self correct itself.

How is government spending and the national economy as a whole like and unlike one homeowner fixing a broken window? Explain your answer.

Intuitive metaphors like "we must tighten our belts" break down when applied to macroeconomics. If you run into hard times cutting spending and stashing money in your mattress makes sense. But if everyone cuts spending and stashes money in their mattresses the economy comes to a screeching halt.

Besides, who said anything about deliberately destroying things, e.g. breaking windows? If Britain is anything like the U.S. it has a lot of infrastructure needs. The government can spend, building roads and bridges that we need and also making up for the temporary fall in demand, 'priming the pump' and getting the economy moving again. At the end of your example all we have is the same window we started with. At the end of mine we have a bunch of roads and bridges we didn't have before.

The real-life record of austerity in times of recession is terrible. Britain, and Europe in general, have pursued much more austerity than the U.S. since 2008 and have had much slower economic growth.

The real world is complicated and counterintuitive, not always susceptible to explanation by simplified metaphor.

Ok let me change the examples around since you're having trouble.

Country A creates a bunch of laws that make its citizens automatic criminals for petty offenses. This in turn creates prisons which are put into small towns. The prisons employ people from these small towns and also buy goods produced locally such as food. The prison using tax dollars from the penal system pays locally into the economy making jobs.

However, do you or I want to pay extra taxes for jailing people for petty nonviolent offenses like talking back to a cop or smoking marijuana? I pay more in taxes when I'd rather use my money for investment into a small business. I'm still forced by wealth redistribution to pay into something that doesn't help humanity.

Another example:
Replace prisons with military. Oh now you want to spend trillions on a jet plane that can also VTOL all over the place. The trillions of cash came from tax money and get spent at defense contractors hiring engineers who then mass produce the jets with thousands of workers. These workers then spend their money elsewhere fueling the local economy.

Those jets then go on to blow up a ton breaking windows.

Another example:
The government starts taxing for welfare which then necessitates a social worker agency to manage who gets the money. This agency skims off the tax money to pay people to process applications. An unemployed single mother goes in and signs up for benefits. She makes enough money to live in a nice 3 bedroom house, get covered healthcare for her children, food, and spending cash at the end of the month. All for doing nothing. She doesn't work at all because she doesn't have to, but the welfare money that came from taxes goes into the local economy.

What happens when you eliminate the money spent on the prison, jet planes, and welfare? The people making a living from them end up unemployed womp womp causing short term hurt.

However, my tax liability has decreased. Now I am able save and soon enough, I have enough money to open my own business where I employ one former prison guard, an engineer, a ton of assembly line workers, and a secretary formally on government dole to help create glass widgets that people want to buy.

Now, my glass widgets don't kill or imprison people they make beautiful decorations for people's living rooms making them happier and an unemployed single mom has a job and is able to set a good example for her fatherless son by staying gainfully employed.

They key factor here is does it add or detract from the human experience? I'd argue that prisons and fighter jets are way worse than welfare, but when you have generations of people on welfare is it really helping society?

Do you see how it works now?

How about this: instead of imaginary hypotheticals, why don't we talk about the real world?

Suppose a shock to the economy--e.g. a financial crisis--causes a recession. We now have a lot of people out of work, with no money to spend. We have a lot factories and farms producing less than they could because no one is buying. We have people who would like to work in those factories and farms, but of course they aren't hiring. And we have people who would like to have the goods that those factories, farms, and workers would produce, but they have no money to buy and anyway the goods aren't being produced.

(After all, this is what a recession is. Factories, farms, and workers don't disappear. But due to some shock the same factories, farms, and workers are producing less than they were the day before. No one came into the U.S. in 1929 and blew up railroads, factories, and irrigation lines. But somehow the economy produced much less in 1930 than in 1928.)

Back to my example: seeing this stagnation in the economy, the government intervenes--NOT, unlike your example, by taxing productive people and giving people welfare money, but by putting people to work producing goods and services society needs. The government hires some of those unemployed people to build schools and fix roads. The government buys building supplies, etc. for those schools and roads, putting come of those factories back in business. The factories hire more people. The road and school builders and the factory workers now have money to spend; they buy more goods and services, and the whole economy comes out of stagnation. Total production goes UP.

How is this paid for? The government temporarily deficit-spends. Wait, you say: that just means it will have to tax productive people to pay that debt. Maybe John Galt and Howard Rourke aren't being taxed today, but they'll have to be taxed tomorrow.

But here's the thing: when that deficit has be be repaid, the whole economy will be bigger. Remember all those people who weren't working, all those idle factories? They are all working now. The GDP of Great Britain is 2.678 trillion in 2013. Suppose the government borrows 267.8 billion for deficit spending--10% of GDP. As a result the economy is restored to 3% annual growth. After 4 years the economy is producing 112% of what it was. That 10% of GDP can be repaid with less than one year's additional production--at that growth is happening year after year after year.

No one has to come and take your hard-earned money. Society just becomes richer. It is, quite literally, free money. Because people who weren't working now are. Factories are running extra shifts. There is literally more stuff. It's like magic.

And the only reason Europe isn't doing it is because of the dogma of austerity. Trillions of dollars of possible growth are being left on the table because of bad policy--because people believe fairy tales about broken windows and tightening belts and hippies who don't want to work instead of paying attention to sound economic theory and real-world experience.

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Anti-austerity protests in London - The Beast1 - 10-07-2015

Quote: (10-07-2015 02:07 PM)Ryre Wrote:  

Quote: (10-07-2015 01:08 PM)The Beast1 Wrote:  

Quote: (10-07-2015 12:14 PM)Ryre Wrote:  

Quote: (10-07-2015 11:28 AM)The Beast1 Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

It's called the broken window fallacy.

A boy goes and breaks a window with a ball. The homeowner then has to go to a window shop where a gent makes a window. That window came from silica and came elsewhere further down the line employing a small army of people to make that final product.

Is the broken window bad for the economy? No! However, it robs the home owner of money to do something else instead of fixing that window. Argument also works well for prison spending and small towns which are entirely supported by the prison.

Prison spending is the same way and so is welfare. I would rather be spending my money on investments and making a small business which would create more wealth than taking my money and handing it directly to the poor robbing me of the opportunity to spend my money where I please.

So yes, it does cause a downturn but that is the withdrawal effect of removing malinvestment. Give it time and the market will self correct itself.

How is government spending and the national economy as a whole like and unlike one homeowner fixing a broken window? Explain your answer.

Intuitive metaphors like "we must tighten our belts" break down when applied to macroeconomics. If you run into hard times cutting spending and stashing money in your mattress makes sense. But if everyone cuts spending and stashes money in their mattresses the economy comes to a screeching halt.

Besides, who said anything about deliberately destroying things, e.g. breaking windows? If Britain is anything like the U.S. it has a lot of infrastructure needs. The government can spend, building roads and bridges that we need and also making up for the temporary fall in demand, 'priming the pump' and getting the economy moving again. At the end of your example all we have is the same window we started with. At the end of mine we have a bunch of roads and bridges we didn't have before.

The real-life record of austerity in times of recession is terrible. Britain, and Europe in general, have pursued much more austerity than the U.S. since 2008 and have had much slower economic growth.

The real world is complicated and counterintuitive, not always susceptible to explanation by simplified metaphor.

Ok let me change the examples around since you're having trouble.

Country A creates a bunch of laws that make its citizens automatic criminals for petty offenses. This in turn creates prisons which are put into small towns. The prisons employ people from these small towns and also buy goods produced locally such as food. The prison using tax dollars from the penal system pays locally into the economy making jobs.

However, do you or I want to pay extra taxes for jailing people for petty nonviolent offenses like talking back to a cop or smoking marijuana? I pay more in taxes when I'd rather use my money for investment into a small business. I'm still forced by wealth redistribution to pay into something that doesn't help humanity.

Another example:
Replace prisons with military. Oh now you want to spend trillions on a jet plane that can also VTOL all over the place. The trillions of cash came from tax money and get spent at defense contractors hiring engineers who then mass produce the jets with thousands of workers. These workers then spend their money elsewhere fueling the local economy.

Those jets then go on to blow up a ton breaking windows.

Another example:
The government starts taxing for welfare which then necessitates a social worker agency to manage who gets the money. This agency skims off the tax money to pay people to process applications. An unemployed single mother goes in and signs up for benefits. She makes enough money to live in a nice 3 bedroom house, get covered healthcare for her children, food, and spending cash at the end of the month. All for doing nothing. She doesn't work at all because she doesn't have to, but the welfare money that came from taxes goes into the local economy.

What happens when you eliminate the money spent on the prison, jet planes, and welfare? The people making a living from them end up unemployed womp womp causing short term hurt.

However, my tax liability has decreased. Now I am able save and soon enough, I have enough money to open my own business where I employ one former prison guard, an engineer, a ton of assembly line workers, and a secretary formally on government dole to help create glass widgets that people want to buy.

Now, my glass widgets don't kill or imprison people they make beautiful decorations for people's living rooms making them happier and an unemployed single mom has a job and is able to set a good example for her fatherless son by staying gainfully employed.

They key factor here is does it add or detract from the human experience? I'd argue that prisons and fighter jets are way worse than welfare, but when you have generations of people on welfare is it really helping society?

Do you see how it works now?

How about this: instead of imaginary hypotheticals, why don't we talk about the real world?

Suppose a shock to the economy--e.g. a financial crisis--causes a recession. We now have a lot of people out of work, with no money to spend. We have a lot factories and farms producing less than they could because no one is buying. We have people who would like to work in those factories and farms, but of course they aren't hiring. And we have people who would like to have the goods that those factories, farms, and workers would produce, but they have no money to buy and anyway the goods aren't being produced.

(After all, this is what a recession is. Factories, farms, and workers don't disappear. But due to some shock the same factories, farms, and workers are producing less than they were the day before. No one came into the U.S. in 1929 and blew up railroads, factories, and irrigation lines. But somehow the economy produced much less in 1930 than in 1928.)

Back to my example: seeing this stagnation in the economy, the government intervenes--NOT, unlike your example, by taxing productive people and giving people welfare money, but by putting people to work producing goods and services society needs. The government hires some of those unemployed people to build schools and fix roads. The government buys building supplies, etc. for those schools and roads, putting come of those factories back in business. The factories hire more people. The road and school builders and the factory workers now have money to spend; they buy more goods and services, and the whole economy comes out of stagnation. Total production goes UP.

How is this paid for? The government temporarily deficit-spends. Wait, you say: that just means it will have to tax productive people to pay that debt. Maybe John Galt and Howard Rourke aren't being taxed today, but they'll have to be taxed tomorrow.

But here's the thing: when that deficit has be be repaid, the whole economy will be bigger. Remember all those people who weren't working, all those idle factories? They are all working now. The GDP of Great Britain is 2.678 trillion in 2013. Suppose the government borrows 267.8 billion for deficit spending--10% of GDP. As a result the economy is restored to 3% annual growth. After 4 years the economy is producing 112% of what it was. That 10% of GDP can be repaid with less than one year's additional production--at that growth is happening year after year after year.

No one has to come and take your hard-earned money. Society just becomes richer. It is, quite literally, free money. Because people who weren't working now are. Factories are running extra shifts. There is literally more stuff. It's like magic.

And the only reason Europe isn't doing it is because of the dogma of austerity. Trillions of dollars of possible growth are being left on the table because of bad policy--because people believe fairy tales about broken windows and tightening belts and hippies who don't want to work instead of paying attention to sound economic theory and real-world experience.

I do agree with you, deficeit spending in the past has helped improve economic downturns. However your examples of economic downturns aren't perfect.
The stock market crash in 29 was caused by stock speculation and excessive margin buying. There was a massive bubble in commodities driven by easy credit. The bubble blew and all of that excess capacity and malinvestment disappeared because there was artificial demand for it.

What was the solution for getting out of the Great Depression? Hitler came along and fixed it.

Except nowadays things are different. The factories you're referencing are non existent. They've been outsourced. No one is making widgets.
So the solution of "lowering taxes" and borrowing doesn't work because it doesn't drive exports. No country is a 100% isolated and needs imports and exports. You need organic growth to sustain countries.

And finally you're "free money" example came from printing money. They can call it quantitative easing and some other technical term, but they took money that was locked up in debt and re-released it into the market creating cheap credit.

Britain's debt to GDP ratio was 80% in 2015. If you factor in public and private debt it explodes way past 100%.

So here's a gamble, what happens when your free money doesn't actually create sustainable growth and instead just makes a bubble?

You want an example of what happens when someone overspends? Take a look at Greece, the new German debt colony. Do you really think their 175% debt to GDP is ever going to get paid off?

Nope, the whole point was to lull everyone into socialism and then use that free bank money to gobble up the collateral. All of those schools, roads, hospitals, airports, and other public infrastructure projects paid for by the people of Greece are now owned by German banks. Don't think the UK or the US will fair any differently.

Time will tell us who is right. I was short housing and stocks in 2008. I'll be short the next time around.

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Anti-austerity protests in London - Ryre - 10-07-2015

Quote: (10-07-2015 02:28 PM)The Beast1 Wrote:  

I do agree with you, deficeit spending in the past has helped improve economic downturns. However your examples of economic downturns aren't perfect.
The stock market crash in 29 was caused by stock speculation and excessive margin buying. There was a massive bubble in commodities driven by easy credit. The bubble blew and all of that excess capacity and malinvestment disappeared because there was artificial demand for it.

What was the solution for getting out of the Great Depression? Hitler came along and fixed it.

Except nowadays things are different. The factories you're referencing are non existent. They've been outsourced. No one is making widgets.
So the solution of "lowering taxes" and borrowing doesn't work because it doesn't drive exports. No country is a 100% isolated and needs imports and exports. You need organic growth to sustain countries.

And finally you're "free money" example came from printing money. They can call it quantitative easing and some other technical term, but they took money that was locked up in debt and re-released it into the market creating cheap credit.

Britain's debt to GDP ratio was 80% in 2015. If you factor in public and private debt it explodes way past 100%.

So here's a gamble, what happens when your free money doesn't actually create sustainable growth and instead just makes a bubble?

You want an example of what happens when someone overspends? Take a look at Greece, the new German debt colony. Do you really think their 175% debt to GDP is ever going to get paid off?

Nope, the whole point was to lull everyone into socialism and then use that free bank money to gobble up the collateral. All of those schools, roads, hospitals, airports, and other public infrastructure projects paid for by the people of Greece are now owned by German banks. Don't think the UK or the US will fair any differently.

Time will tell us who is right. I was short housing and stocks in 2008. I'll be short the next time around.

Greece is in a bad way for sure. But in 2007 their debt was only 100% of GDP. To a great degree the recession/massive economic contraction they experienced caused their debt problem, not the other way around (i.e. their debt to GDP ratio got bad more because GDP shrank than because debt grew).

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Anti-austerity protests in London - Engineer - 10-07-2015

Someone please troll them by having them #takeapissonausterity and have them post pix on social media of pissing their pants in protest.

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Anti-austerity protests in London - The Beast1 - 10-07-2015

Quote: (10-07-2015 02:47 PM)Ryre Wrote:  

Quote: (10-07-2015 02:28 PM)The Beast1 Wrote:  

I do agree with you, deficeit spending in the past has helped improve economic downturns. However your examples of economic downturns aren't perfect.
The stock market crash in 29 was caused by stock speculation and excessive margin buying. There was a massive bubble in commodities driven by easy credit. The bubble blew and all of that excess capacity and malinvestment disappeared because there was artificial demand for it.

What was the solution for getting out of the Great Depression? Hitler came along and fixed it.

Except nowadays things are different. The factories you're referencing are non existent. They've been outsourced. No one is making widgets.
So the solution of "lowering taxes" and borrowing doesn't work because it doesn't drive exports. No country is a 100% isolated and needs imports and exports. You need organic growth to sustain countries.

And finally you're "free money" example came from printing money. They can call it quantitative easing and some other technical term, but they took money that was locked up in debt and re-released it into the market creating cheap credit.

Britain's debt to GDP ratio was 80% in 2015. If you factor in public and private debt it explodes way past 100%.

So here's a gamble, what happens when your free money doesn't actually create sustainable growth and instead just makes a bubble?

You want an example of what happens when someone overspends? Take a look at Greece, the new German debt colony. Do you really think their 175% debt to GDP is ever going to get paid off?

Nope, the whole point was to lull everyone into socialism and then use that free bank money to gobble up the collateral. All of those schools, roads, hospitals, airports, and other public infrastructure projects paid for by the people of Greece are now owned by German banks. Don't think the UK or the US will fair any differently.

Time will tell us who is right. I was short housing and stocks in 2008. I'll be short the next time around.

Greece is in a bad way for sure. But in 2007 their debt was only 100% of GDP. To a great degree the recession/massive economic contraction they experienced caused their debt problem, not the other way around (i.e. their debt to GDP ratio got bad more because GDP shrank than because debt grew).

You're right, they were a mess before this all started.

The real shit show will be the USA! Goodness i'm curious how that debacle will fair if they ever default.

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Anti-austerity protests in London - Easy_C - 10-07-2015

Quote: (10-07-2015 12:03 PM)NO_LIMIT_CRACKA Wrote:  

Quote: (10-07-2015 10:57 AM)Ryre Wrote:  

Austerity measures have been shown to be terrible for economic growth/recovery. The protests may not so much be people demanding free stuff as people who want the government to stop pursuing dumb, self-defeating economic policies that hold down growth and increase unemployment.

So you're saying that curbing your overspending back down to sustainable levels is somehow bad for recovery? Reducing your spending..... when you don't have that money to spend..... is bad for recovery?

That's not what "austerity" means in practice. In practice it means you try to squeeze the citizenry to pay off the country's bondholders.

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Anti-austerity protests in London - Foolsgo1d - 10-07-2015

Austerity in practice is a far and away from what it is on paper. They say there are very few funds to go around for essential services such as disabled & elderly care, police officers and adequate housing for vulnerable people but yet, they can find £200 million for Syrian refugees, billions of foreign aid (which goes to despots and terrorists AND nuclear powers such as Pakistan, India etc).

We're told it is vital to help others around the world but we have mentally ill people who are capable of murder walking around when they should be under lock and key. We have criminals set free because we have few prisons and we are unable to approve funding for new nuclear power stations and infrastructure. Instead we pull our skirt up to invite the Chinese cock to give us some cash injection.

It doesn't add up.

However I hate the hippies, socialists and anarcho protesters who believe they and their friends are entitled to free money "just because". They're sad sacks of shite who are feckless, lazy and stupid.

The only people who are at these protests are those who have no responsibilities, no jobs and no life. They can go fuck themselves and that goes double for the Labour party Leader (Corbyn) who attends these rallies.

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Anti-austerity protests in London - LeeEnfield303 - 10-07-2015

Youse guys need an honesttogod #OccupyPicadilly movement so I can laugh my ass off

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Anti-austerity protests in London - Constitution45 - 10-07-2015

These people don't really have any conviction, if it really was a struggle or desperate issue then you wouldn't be seeing them smiling like that. Its a fashion thing, I know some of these people personally, I actually recognize the guy on the far right of that photo from sometime ago. They will take photos of them doing a protest and post it on Facebook. They feign outrage but it genuinely means nothing to them. A lot of them grew up listening to music and musicians from the 60s/80s when this counter establishment stuff was the fad. They don't realise that they now are the establishment. If they wanted to be truly radical and trendy, then they would ditch feminist, multiculturalism, and go to marry mormons or if they are males, then they would grow a set of balls and join the 'neo masculine movement'.

The working class just doesn't exist anymore, even the Poles who came over to work in the labour industry a few years back have even gone back home or managed to climb up the social ladder. Let alone the native Brits. You have an aspiring middle class and underclass. The closest thing you will get to having a working class is more of a temporary stage in which people usually drop or accelerate from. All of this Charlotte Church 'I come from a working class background and used to get free lunches in school' is absolute rubbish.

Real working class people don't show off about this unless they are rappers. The working class is like some sort of weird forbidden fruit for the middle class trendy types in Britain. They will imitate their accents during university or perhaps later during their 20s when they decide to settle in a gentrified area. But in reality they just don't have anything in common with them. For one poor people are nationalistic, it doesn't matter if they are muslim, white or black; they have strong connections to their nationality or local tribe. Onto a second point they are doers not thinkers, so don't get me started on how relations between men and women are viewed. You will never meet a 'working class feminist'.


On to a last point, which is related to the on going Migrant crisis. When you look at most ethnic groups aside from Black Brits, they actually do very well for themselves. Even among muslims, on the surface their communities are poor and run down, but you will always see that they look out for themselves. Selling businesses to other muslims, or sending money back to Pakistan that will lead to big houses and vast amounts of wealth. Hindus live in relatively a strong diaspora, you wouldn't believe how much they operate by their own economy.

The be all end all is that these goofy idiots are essentially useful idiots. God every intelligent person and their dog understand truly that multiculturalism, environmentalism and feminism are 'progressive' causes just to push political agendas. I.e. Big oil companies will pay environmentalists to campaign against their competitors pipeline plans while maintaining that they care for the environment. Anyone who believes that political correctness or these left wing causes have any real merit are just usually the ignorant offspring from sheltered families.

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