Then replace tools and glass.
Return to step one.
What this “genius” doesn’t understand is that in the short term, austerity hurts, but works in the long term - a place we haven’t gotten to yet.
Even worse, in the short term, “stimulus” works (because the market is being flooded with fiat money) - but it is disastrous in the long term by significanlty de-valuing currency - and in the long term, collapsing the economy.
And we haven’t gotten there yet either.....
The result of Marxist-induced short-term thinking and a culture that wants immediate gratification - as well as avoiding any sacrifice or pain for the long term good.
DUH!
The solution is not austerity, but a radical decrease in the size of government and the repayment of debt though forced indentured servitude of liberals and the lazy. Let's call it workfare.
It also just happens to be fair to the productive.
This article is partially correct. The trick is in what you stimulate. If you line contributors pockets with cash, sending money to so-called green projects that employ few people, and reward the unemployed for not working, that is not “stimulus”. If you put the money towards large long-lasting public infrastructure projects that employ significant numbers of people, not only during their construction, but in their operation and maintenance, that is stimulus. This would include transportation and energy transport systems. Taking coal and other energy systems away are anti-stimulus projects.
So cutting a gigantic bloated government, spending 50% more than it takes in, by a mere few point in growth is now economic austerity?
I have a bridge to sell Mr. Blodget if he really believes that.
Both “austerity” and “stimulus” do more harm than good when done by governments to stimulate economic growth.
Think of John Doe as the patient and Uncle Sam as the doctor. John Doe is flat on his back and sick in bed, unable to work and certainly unable to pay the doctor.
Under “austerity” therapy, the doctor would just leave John Doe alone to rest until he was well again. If he gets better on his own he can go back to work and pay the doctor. If he doesn’t get better right away, the temptation is for the doctor to monkey around with more “treatments” and “gimmicks” that will run up the bill. If John dies, the doctor gets nothing.
Under “stimulus” therapy, the doctor forces his sick patient to work to buy his own food and medicine to make him get well so he can work and pay the bill. If the patient is unable to work, the doctor steals food and medicine from his other patients or from John to give to him, which causes John to owe a lot more. If the doctor gives John too much of the wrong kind of medicine, he will stay sick and could even die.
As you can see from this analogy, the best outcome is for the quack doctor to do nothing but make the patient comfortable so he can get better on his own.
I’m always up for an education, so please correct me where I’m wrong.
Isn’t government spending one of the elements of GDP? By increasing government spending you haven’t really directly increased economic production, making GDP an faulty indication of the health of the economy. It’s like a self-fulfilling prophecy.
The author also says, “...this approach rests on the theory that our economy is crappy because our government is spending more than it takes in and that the resulting deficit is creating ‘uncertainty.’”
That’s not right either. Government spending is taking capital from the market that it would otherwise use to grow/expand. Austerity slows that bleed from the market. It’s like the supporters of “Stimulus” think that taking gas out of your car and pouring it on the road will make your car go farther.
The “stimulus” approach is better.
Stimulus aimed at giving huge amounts of cash to international bankers has done nothing short term except to inflate the stock market and fill the personal pockets of the crooks.
The government is not all-controlling. The economy recovered despite, not because, of policy.
“What looks like a recovery, a rally or an increase in consumer confidence may just be the effect of elites passing money among themselves.”
Socialism Is Legal Plunder - Bastiat 1801=1850
BIG GOVERNMENT IS CRONY SOCIALISM
Cut, cut, CUT! Death by a million cuts. Pick any one of their tiniest programs (Big Bird gets you a million angry bird march on D.C.) and cut it. Listen to the socialists whine. How about social security (built on the backs of dead Americans)? They even insulated it from discussion by labeling it “the third rail”. Look at the firestorm when President Bush wanted to allow you to put some of your confiscated funds into the market. I could go on and on...
Pick one. Any one. Cut it out.
Plunder and Death - Socialism/Totalitarianism 2.0
live - free - republic
That's false.
The economy is "crappy" because the government takes too much out of the private sector. The entire budget of the United States could be borrowed -- all deficit spending. But if the level of spending was low enough, business could still expand.
The deficit is almost beside the point. It's the level of spending.
The economy is NOT improved by enlarging a dependent class of non-producers!
The “proof” is that the U.S. economy still sucks!
There is NO merit in contrasting European austerity with U.S. stimulus, as it proves nothing, given the long standing socialist nature of those European economies.
The “Uncertainty” present in the U.S. economy derives from a growing regulatory burden, compounded with the threat and reality of ever increasing taxes.
If the gubmint was spending down cash-on-hand that would be one thing. Like drawing on your cash reserves in an emergency. But borrowing at these levels, in fiat money, makes EVERYONE poorer. (econ 101 - helicopters dropping $100 bills makes a sandwich cost $100 = inflation i.e. rising prices NOT rising values, so YOUR savings are worth-less)
My Plan:
1- reduce the overhang of government by strictly limiting to the legitimate role of a Constitutional government.
2- reduce taxes to the extent needed to fund the legitimate role of that Constitutional governemnt
3- repeal the 17th amendment, Roe and other pernicious enablers.
4- establish term-limits
5- ban local/state/federal government unions
6- impeach John Roberts
. . . and there was happiness throughoutt the land, and He saw it was good.
The “best” part is, when the collapse comes (and it will), Keynesian economists will blame it on business.
Contact: e-mail: hblodget@businessinsider.com
Economist Paul Krugman put up a chart this morning that reminds us how well it has worked
Henry, you are a good example of the stupidity that is currently in charge of this country. Krugman on the other hand is just quite simply a plain a$$hat parading as an econmist. Following your logic I could vastly improve my economic outlook if I just ran out and borrowed as much money as I am capable of and spend baby spend. Government stimulus may be good when the government is running surpluses, however, running deficits means they have to borrow that money. Borrowing money is something the government has been doing for far too long, and hitting this banker (and other tax paying citizens) by raising taxes, counteracts a stimulus. So that leaves the government with borrowing from China.
No Henry, the real chart will come after we are thrown into a giant tailspin and Europe's austerity continues to slower, but steadily, reap rewards. That is if they don't keep bailing out too many of the bad economies in Europe that have been stimulating their economies for decades upon decades
Wow, So enslaving our children in perpetual debt and requiring them to pay up to 50% of their daily output to pay interest to the Money Changers for allowing us to have Dollars to Trade with is a good thing?? The title of this article should be:
Why Slavery is better than Freedom.
Austerity is a political loser.
It works up to a point. But if you use as a bludgeon to flatline an economy rather than spur economic growth - which is what the Germans have imposed by diktat on southern Europe, you risk social collapse.
Without economic growth, the public is not inclined to suffer for the sake of the elites and they’re right. Any one who pointlessly harms them and their families will get punished. I’m all for reducing government spending but using it to kill the economy is foolish in the extreme.
How about that...
“newly formed Consumer Financial Protection Bureau (CFPB).”
http://cnsnews.com/news/article/obama-administration-gave-petraeuss-wife-187605-year-job
BIG GOVERNMENT IS...
C R O N Y S O C I A L I S M
He’s a sharp guy who’s a political idiot. NYC is full of his type.
There have been two kinds of ‘austerity’ tried in Europe.
Most countries have inflicted austerity on their populations by raising taxes, a few by cutting spending. Those who’ve gone the cutting spending route—Estonia and some Scandanavian countries, for example—are doing much, much better.
it’s only stupid if your normal, ODUNGO is doing it on purpose without restraints....