Austerity Megaflop: 0.3% GDP growth for UK proves stimulus was the right policy

[velvtacheeze]

UK economy is bouncing along the bottom and could take three years to heal, warns Cabinet minister Ken Clarke | Mail Online


Thank goodness the US didn't make the mistake of doing what the GOP wanted. Although it should have been bigger by 50% to 100%, and less reliant on dubious tax cut giveaways, the stimulus was a big success. It helped end the Bush Recession, and got us back on track. Obama was rewarded with his pro-America policies with a resounding reelection victory.

The UK Conservatives have a lot to learn from us.

 

[waltky]

Sluggish global recovery expected...

Global growth projection lowered to 2.2 pc
Thursday 13th June, 2013 WASHINGTON - Global GDP is expected to expand at a lower pace of about 2.2 percent this year compared to 2.3 percent in 2012, pulled down by ongoing contraction in the Euro Area and a modest growth in developing countries due to supply side bottlenecks, says World Bank in its latest Global Economic Prospects (GEP) report.

On the positive side, risks from advanced economies have eased and growth is firming but on the negative side the pick-up in developing countries is expected to be modest because of capacity constraints in several middle income countries like Brazil, India, Russia, South Africa and Turkey, warns the multilateral agency. "While there are markers of hope in the financial sector, the slowdown in the real economy is turning out to be unusually protracted," said Kaushik Basu, Senior Vice President and Chief Economist at the World Bank. "This is reflected in the stubbornly high unemployment in industrialized nations, with unemployment in the Eurozone actually rising and in the slowing growth in emerging economies, with India's annual growth having dropped below 6 percent for the first time in 10 years. "Also, there is heightened speculation that the US may withdraw QE (quantitative easing) and widespread concern about its consequences. By going into these topical matters, the World Bank's latest Global Economic Prospects alerts us to both the hopes and the risks in the global economy, and also gives valuable instructions on policy."

So while the global economic growth is projected to expand from about 2.2 percent this year to 3.0 percent and 3.3 percent in 2014 and 2015 respectively, in the high-income countries, fiscal consolidation, high unemployment and still weak consumer and business confidence is expected to keep growth this year to a modest 1.2 percent but firming to 2.0 percent in 2014 and 2.3 percent by 2015. The report states that the developing countries GDP is now projected to be around 5.1 percent in 2013, further strengthening to 5.6 percent and 5.7 percent in 2014 and 2015, respectively. "Growth in Brazil, India, Russia, South Africa and Turkey has been held back by supply bottlenecks. While external risks have eased, growth in these countries is unlikely to reach pre-crisis rates unless supply-side reforms are completed," the report states.

China, which had charted over 9 percent growth for several years, is now expecting around 7 percent growth as authorities seek to rebalance the economy. In a broader region-wise forecast, the World Bank report has projected 7.3 percent growth for the East Asia Pacific region, 2.8 percent for Europe and Central Asia, 3.3 percent in Latin America and the Caribbean, 2.5 per cent in the Middle East and North Africa, 5.2 percent in South Asia; and 4.9 percent in Sub-Saharan Africa. Economic contraction in the Euro Area is projected by the World Bank to be 0.6 percent for 2013, compared with the previous projection of 0.1 percent. Euro Area growth is expected to be a modest 0.9 percent in 2014 and 1.5 percent in 2015.

- See more at: The Africa News - Global growth projection lowered to 2.2 pc

 

[Decus]

How has the stimulus worked out for Japan? I can't wait for your expert analysis.

 

[ABikerSailor]

Yanno......................the countries in the EU that had decided to go with austerity have come up with a lot of economic problems.

Greece, for one, comes to mind. They almost lost their standing in the EU.

 

[editec]

Much as I think that Austerity is a bad policy I am reluctant to compare national outcomes based on one metric.

 

[Seawytch]

Much as I think that Austerity is a bad policy I am reluctant to compare national outcomes based on one metric.

Except this is one MORE metric, not just one.

 

[The Rabbi]

Much as I think that Austerity is a bad policy I am reluctant to compare national outcomes based on one metric.

Except this is one MORE metric, not just one.

No, it's one.
In any case it is misplaced as the issue is not just gov't spending but gov't over reach in stifling business formation and growth.

 

[Wacky Quacky]

TC, go read your own link, then come back and try again.

 

[TemplarKormac]

As anyone alive back then noticed, Stagflation was the result of failed Keynesian type policies.... so austerity is still a superior option. And too bad we aren't the UK.

 

[bripat9643]

Yanno......................the countries in the EU that had decided to go with austerity have come up with a lot of economic problems.

Greece, for one, comes to mind. They almost lost their standing in the EU.

They didn't "almost lose their standing" because they cut spending. For one thing, they haven't cut spending. They almost lost their standing because they can't pay their bills.

 

[bripat9643]

UK economy is bouncing along the bottom and could take three years to heal, warns Cabinet minister Ken Clarke | Mail Online


Thank goodness the US didn't make the mistake of doing what the GOP wanted. Although it should have been bigger by 50% to 100%, and less reliant on dubious tax cut giveaways, the stimulus was a big success. It helped end the Bush Recession, and got us back on track. Obama was rewarded with his pro-America policies with a resounding reelection victory.

The UK Conservatives have a lot to learn from us.

What austerity?

'Austerity' To Blame? But Where's The Austerity? - Forbes

The official Keynesian story is that the PIIGS of Europe (Portugal, Italy, Ireland, Greece and Spain) have been devastated by cutbacks in public spending. Austerity has made things worse rather than better – clear proof that Keynesian stimulus is the answer. Keynesians claim the lack of stimulus (of course paid for by someone else) has spawned costly recessions which threaten to spread. In other words, watch out Germany and Scandinavia: If you don’t pony up, you’ll be next.

Erber finds fault with this Keynesian narrative. The official figures show that PIIGS governments embarked on massive spending sprees between 2000 and 2008. During this period, their combined general government expenditures rose from 775 billion Euros to 1.3 trillion – a 75 percent increase. Ireland had the largest percentage increase (130 percent), and Italy the smallest (40 percent). These spending binges gave public sector workers generous salaries and benefits, paid for bridges to nowhere, and financed a gold-plated transfer state. What the state gave has proven hard to take away as the riots in Southern Europe show.

Then in 2008, the financial crisis hit. No one wanted to lend to the insolvent PIIGS, and, according to the Keynesian narrative, the PIIGS were forced into extreme austerity by their miserly neighbors to the north. Instead of the stimulus they desperately needed, the PIIGS economies were wrecked by austerity.

Not so according to the official European statistics. Between the onset of the crisis in 2008 and 2011, PIIGS government spending increased by six percent from an already high plateau. Eurostat’s projections (which make the unlikely assumption that the PIIGS will honor the fiscal discipline promised their creditors) still show the PIIGS spending more in 2014 than at the end of their spending binge in 2008.

As Erber wryly notes: “Austerity is everywhere but in the statistics.”

 

[TemplarKormac]

Yanno......................the countries in the EU that had decided to go with austerity have come up with a lot of economic problems.

Greece, for one, comes to mind. They almost lost their standing in the EU.

They didn't "almost lose their standing" because they cut spending. For one thing, they haven't cut spending. They almost lost their standing because they can't pay their bills.

Don't get me started on our credit rating.....

 

[midcan5]

Shhhhh.... the wingnuts are conditioned that starving the poor and giving more to the rich is the only course of action and it will eventually bring happiness to all. Shhhh....

http://www.usmessageboard.com/economy/294793-the-austerity-trap.html

[ame=http://www.youtube.com/watch?v=CKCvf8E7V1g]Banned TED Talk: Nick Hanauer "Rich people don't create jobs" - YouTube[/ame]



'Plumbing the Depths of Inequality' Claude S. Fischer
Plumbing the Depths of Inequality | Boston Review

America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy
A Realistic Radicalism | Dissent Magazine

 

[CrusaderFrank]

American capitalism has made us the #1 economy on the planet and dragged over 1 billion people out of Progressive economic failure.

It's time we get back to what works

 

[Dot Com]

American capitalism has made us the #1 economy on the planet and dragged over 1 billion people out of Progressive economic failure.

It's time we get back to what works

is that the same as "war corporatism": using taxpayer $$$ in the Pentagon as a piggy bank for contractors who then take that taxpayer $$$ & donate it to favorable politicians? THAT Merkin capitalism? war is good for business. Ask the Carlyle Group

[ame=http://www.youtube.com/watch?v=qO_8RwXMMwI]What Barry Says - YouTube[/ame]

 

[Wyatt earp]

UK economy is bouncing along the bottom and could take three years to heal, warns Cabinet minister Ken Clarke | Mail Online


Thank goodness the US didn't make the mistake of doing what the GOP wanted. Although it should have been bigger by 50% to 100%, and less reliant on dubious tax cut giveaways, the stimulus was a big success. It helped end the Bush Recession, and got us back on track. Obama was rewarded with his pro-America policies with a resounding reelection victory.

The UK Conservatives have a lot to learn from us.

Your an Idiot, Germany did the same thing and their UE is at 5.4% as of april. The Western world could learn from them..

 

[ABikerSailor]

American capitalism has made us the #1 economy on the planet and dragged over 1 billion people out of Progressive economic failure.

It's time we get back to what works

Yeah...............it did.................right up until the 80's when greed took over.

CEO's make staggering amounts of money, find places to stash it tax free (because they can afford the lobbyists and the lawyers) while the rest of the working class slowly gets poorer.

What worked? Back in the 50's and 60's when companies promised that if you worked for them for 25 to 30 years, you'd get a pension and a gold watch for your work.

The only place that exists anymore is the U.S. Military, only problem is, you don't get the gold watch.

However.........................the pension ain't bad.

 

[Avatar4321]

Yanno......................the countries in the EU that had decided to go with austerity have come up with a lot of economic problems.

Greece, for one, comes to mind. They almost lost their standing in the EU.

Maybe they should actually try it instead of saying they are going to.

When you cut spending & cut taxes the economy grows.

Living within your means is good. At least to every sane person knows alittle about finances.

 

[ABikerSailor]

If you cut spending and keep the current taxes, the economy grows.

If you cut spending and raise taxes, the economy grows.

If you cut taxes and cut spending, the economy stagnates.

Think about it.......................if you cut your spending while your paycheck remains the same, you get a bit more in your savings (maybe for a vacation). If you cut your spending and reduce your paycheck at the same time, you remain where you were (with a bit lower vacation).

If you cut your paycheck and raise spending (like Jr. did during his tenure during the war, because there was a tax cut in 2003, AFTER the Iraq war started), you lose money and you eventually end up bankrupt.

Raise the taxes to what Clinton had in 1999, and we can be out of this in a few years, but only trouble is, the rich have gotten used to the tax cuts Jr. gave them, and now feel entitled.

 

[Old Rocks]

Much as I think that Austerity is a bad policy I am reluctant to compare national outcomes based on one metric.

Except this is one MORE metric, not just one.

No, it's one.
In any case it is misplaced as the issue is not just gov't spending but gov't over reach in stifling business formation and growth.

Ah yes, you poor bastards cannot pollute the rivers and air here as they do in China. Such an impostion on your rights.