It's the Economy, stupid - Languishing & Lingering after the Great Recession

Yes.

For example Greece, after decades of excessive government spending, it became virtually impossible for them to finance their debt and ongoing deficit. As a result the EU bailout came with conditions - an austerity budget. Greece is a country with borderline third-world status with spending habits of an international industrial powerhouse nation. If a nation over-spends, enjoys the over-spending and then has to pay the bill - I have no sympathy for that and would not consider the cuts austerity. Greek GDP did not support government spending.

What came first? It seems you argue that austerity leads to lower economic output. I have never seen any evidence that supports this point of view. It is excessive spending that leads to austerity.

With that said, I do not pretend to be an expert - I think my study of these issues is more than most but I do not spend an extensive amount of time in the study European economies. However in the past few years these issues have been in the forefront and I find it important due to what we may experience in the US economy. My personal interests are not international, they are domestic.

 

It is a good graphic that adds clarity and perspective to the issues being discussed. I am not surprised by what it shows.

My thinking has transitioned. We know that changes in government spending can be offset by changes in private sector spending as reflected in GDP, i.e. Greece has about a 17% reduction in government spending but an 8% reduction in GDP. However, there is often a large disproportionate impact by class as a result of government spending cuts. Some classes benefit, some remain static, some are impacted negatively and some impacted severely. It is obvious when you have, for example, a government employee who is terminated due to budget cuts that this person is impacted - but several things could happen. This person may immediately find a compatible private sector job, may provide the same but outsourced service at a personal financial gain, or become unemployed - personally harmed and potentially imposing a social cost. What other impacts are we seeing - given a 5% cut in government spending that does not translate to children not being educated, it may mean larger class sizes but the eduction opportunity in European countries will not be eliminated. What services are really being impacted and to what degree? And what is happening that causes such large disproportionate impacts according to class? If a person is impoverished prior to cuts in government spending and continue to be impoverished how have they been impacted by government budget cuts? And so it goes with the lines of questions I am considering. And ultimately what is it about certain government policy decisions that put certain classes at great risk due to what are in reality modest budget cuts that often result in even more modest or no reductions in national out put or GDP?

True. One benefit of TFP is it causes me to think about issues I would not ordinarily think about.

 

Well, after those baby boomers are dead and gone, what will society look like if we don't reproduce like rabbits?

The question is, how can you have a high quality of life with a declining population? That is the model we should be chasing after.

 

removing the dollar from its position as reference currency would be a significant blow to the american empire.
the up side might be that even the narcissists on the us right come to understand that there is a world beyond the confines of their ideological bubble.
the downside(s) would likely not make of that a justification.

 

this is a database that shows every defense contract (within certain limits, i imagine...) for 2013 by congressional district

http://www.forthecommondefense.org/districts/

so take the information provided in that reuters piece and run your imagination through the data in this database. which was compiled by a conservative think tank.
the data is presented on spreadsheets. while it's probably obvious, enable the editing function and filter the row containing the column headers (there's some lines of junk across the top). that'll make the data usable. look up the congressional district you live in. that'll start to give an idea of the extent of the metastasis of the military-industrial complex (as eisenhower called it).

this is what "military keynesianism" has wraught...an incoherent and fraud-riddled version of social-democratic planning applied only to the conservative patronage system around the military. it operates in an ideological context that gets in the way of recognition, so people act as though they need to fake information lest something bad happen. and there's no coherent co-ordination of the overall objectives. at the same time, as the article points out (without saying it) this system purchases overproduction from contractors in part to maintain employment. that's what a full-employment orientation would lead to (sweden for example before the recession of the late 70s)....

why is this ok for the military-industrial complex and not for the rest of us?

why is this excluded from debate about matters like the deficit and so forth?

here we have inside a neo-liberal context a version of the sort of state interaction with the economy that's historically been the mode whereby large-scale capitalist crises are managed. but folk act like it's not there.

of course there are real problems of fraud and waste in part because of the neo-liberal context.

o yeah...this data is an epic rabbit hole. be forewarned.

 

The economy does better when everyone is buying, but I helped some people clean out their basement and make their lives better now, and didn't have to spend anything to do it. The issue is how we judge the economy and not taking in the realistic quality of life measures too.

 

There is a contradiction in the logic being presented in the last few posts when considered in total. On one hand we get - rich people do not create jobs - on the other we get - if I spend money it creates jobs. One would think rich people are in the group that spends money and one would think since rich people have the most money, they would spend the most, and therefore would be responsible for most job creation. It starts to ounds like some voodoo, trickle down economic speak is going on - something being disputed in the logic.

Here is the real answer - entrepreneurs create jobs! People who actually run payrolls. People who advertise for jobs and actually hire people.

How do these entrepreneurs get in a position to create jobs you ask? They create demand for their goods and services. They build better mouse traps. They invent new goods and services. They come up with more efficient ways to service people. They use intellect to solve problems.

And basic accounting tells use that for every given dollar in revenue, only a small percent goes to profit. At a 10% profit margin for every dollar of revenue 90% of it trickles somewhere. And then when those who make the 10% profit spend and invest it results in 100% going back into the economy somewhere. Money saved and invested - can be used by other entrepreneurs and/or consumers resulting in a real multiplier.

Keynesian economics is simply a temporary stimulus at best. Sooner or later there is an offset with taxation or inflation.