Greece Watch...

johnhemming2 · Post by **johnhemming2** » 27 Jul 2015, 07:33

It is an error to think that the ECB and Eurozone are not aware of various economic concepts and unwilling to consider how they impact sovereign finances.

In the UK this sort of work is done both in the treasury and the OBR. Note that the creation of an independent Bank of England and independent OBR is an attempt to get more reliable predictions. Reliable predictions of the impact of government policy is the key objective.

peaceful_life · Post by **peaceful_life** » 27 Jul 2015, 09:50

'Clearly the Trust Troll is a far uglier and meaner creature than the Confidence Fairy. The Confidence Fairy promised to reward you with economic growth if you imposed austerity. The Trust Troll punishes you with more austerity if the original dose of austerity fails to cause growth'......

http://www.forbes.com/sites/stevekeen/2 ... ust-troll/

vtsnowedin · Post by **vtsnowedin** » 27 Jul 2015, 10:43

In the stimulus vs. austerity debate one must not count his results until all accounts and bills have been settled up, the taxes collected and the bonds payed.
It does no good to have a few years of rapid growth due to ill advised spending if it must be followed with a decades long recession while those bills are being paid off.
It comes down to what did they spend the money on and what they got for the money. Money spent on infrastructure returns benefits to the user/taxpayers long after the bonds are paid while money spent on welfare payments usually just generates another generation of people on welfare.
And it is not as simple as just spending on infrastructure as not all projects are equal or equally managed.
The big dig in Boston just 3.5 miles long and costing 22 Billion dollars when all the interest is added on will never pay for itself, while the original construction of the US interstate highway system at a cost of a million dollars per mile (including the bridges), is one of the best taxpayer bargains ever, and rivaled only by the likes of the Rural Electrification Administration program or Hoover dam.

Little John · Post by **Little John** » 27 Jul 2015, 11:45

This is not necessarily or, even, primarily a debate about stimulus versus austerity. It is, arguably, one about equity. Though, those who would be apologists for the status-quo vis-a-vis the super rich staying that way would, if they get their way, certainly have the debate framed in such a simplistic manner.

biffvernon · Post by **biffvernon** » 27 Jul 2015, 13:14

There certainly shouldn't be any argument over equity. There can be absolutely no blame laid on the 50% of under 25s who are unemployed. They didn't cause the problem!

Post by **kenneal - lagger** » 27 Jul 2015, 13:18

The problem with austerity is that it is only ever austerity for the poor. The rich are never involved in such fripperies: indeed they get tax reductions, more money, to induce them to invest more!

Yes, they do invest more but it is usually in stock market and property bubbles. An article in the Observer yesterday said that companies had increased dividends by 70 times over the last few years in an attempt to chase the share price increase, all at the expense of investment and innovation.

High property prices only increase the pressure on the average person by increasing the proportion of their salaries spent in interest payments to the banks. They also put pressure on high street prices through increases in business rents and property prices. All this takes money out of the economy and makes austerity worse.

The truth of this is not getting through to Joe Public because the press is owned by the same Kleptocracy that is profiting from the crisis and that is putting the blame on the least blameworthy. The more this is pointed out on social media the better the chance there is that public opinion will eventually sway against that Kleptocracy. Until that time "The Prostitute State" will rule!!! www.theprostitutestate.co.uk

johnhemming2 · Post by **johnhemming2** » 27 Jul 2015, 13:25

This isn't true as far as the UK was concerned 2010-2015.

There were assessments done on the distributional analysis of government policy. I can find them if needs be.

Post by **kenneal - lagger** » 27 Jul 2015, 13:33

A resume to support your assertion would be good, John.

johnhemming2 · Post by **johnhemming2** » 27 Jul 2015, 14:24

Chart 2.f

https://www.gov.uk/government/uploads/s ... t_2015.pdf

Post by **clv101** » 27 Jul 2015, 15:51

johnhemming2 wrote:There were assessments done on the distributional analysis of government policy. I can find them if needs be.

Indeed, that's the direct impact of government policy. However, it's also true that the rich have become richer and poor poorer - largely because the returns on labour aren't as big as the returns on capital. That the returns on capital are even greater than the growth rate of the economy means we have a very real problem.

johnhemming2 · Post by **johnhemming2** » 27 Jul 2015, 16:20

That is a technology thing in part.

Little John · Post by **Little John** » 27 Jul 2015, 17:21

johnhemming2 wrote:That is a technology thing in part.

That is a deliberate non-answer, as usual

johnhemming2 · Post by **johnhemming2** » 27 Jul 2015, 17:27

No. It is an important point. Technological changes are reducing the relative value of Labour compared to the capital costs of setting up a business.

Little John · Post by **Little John** » 27 Jul 2015, 17:51

johnhemming2 wrote:No. It is an important point. Technological changes are reducing the relative value of Labour compared to the capital costs of setting up a business.

And that's it? That's your answer? That's the way it is and so there is nothing to be done about it? Tell me, at what point would you consider action necessary?

Post by **clv101** » 27 Jul 2015, 17:54

Little John wrote:
johnhemming2 wrote:That is a technology thing in part.
That is a deliberate non-answer, as usual

That's unfair. Technology is a major driver of the situation we find ourselves in. Certainly not the whole answer but a significant part of it.

I'm not sure anyone has a good plan for making 'labour pay' as it once did. The medium term pressures are to further devalue labour - what's your plan?