Does austerity work? The Left has said no!

[Kimura]

Austerity was implemented after the depression of 1920/1921, government spending was drastically cut. The result? The boom of the 1920s.

And don't give me the claptrap about "that led to the depression". The depression was caused by an over expansion of the money supply, loose monetary policy.

Libtertarians and Austrian cult members claim that the recession of 1920-1921 was some short lived bump in the road. It wasn't. A recession lasting 18 months is very long by the standards of the post-1945 business cycle. The average length of US recessions in the post-1945 world has been around 11 months. The Great Recession of 2007-2009 was way worse than the 1920-1921 recession.

And the Depression, as in the Great Depression, was a result of the gold standard, not "loose monetary policy".

 

[Kimura]

Since no one has "tried" austerity, you must agree that there is no evidence that it works. And I suppose you therefore have no objection to trying anything else, like the policies of the 1948--1970 period which produced the greatest period of growth in world history?

Many countries have tried austerity, some practice it today and it works wonders.

Your debate on this point is with DGS49, not me. I'm happy to discuss examples of austerity with you (you are wrong about 1920) but DGS49 took the position that no one lately has actually tried "real" austerity, and I was responding to that argument.

You really think the adjustment from WWI economy had nothing to do with the depression of 1920? And how do you explain that the austerity measures taken happened after the economy was well on the way to recovery?

Bingo. And there was a massive demobilization as well.

 

[Kimura]

Austerity isn’t even horrible economics, it’s a failed policy with no basis in reality. It’s out of paradigm. Every time austerity has been attempted, regardless of tax policy being recommended by the jackals over at the IMF, it's been an utter failure. The end result, as we’re seeing in the EU, is the atrophy of labor and capital, which pushes countries into depression. Again, for the SFC model challenged, if the government sector goes into surplus, the domestic private sector will go into deficit, similar to the situation we saw with Clinton in the 1990s, which caused private debt loads to skyrocket among other things. Also, just to make my point clearer, a deficit reduction is the fiscal equivalent of a tax increase, since both remove income from the economy.

Obviously, you can't read or understand the post that started this discussion.
Just another Socialist living in a delusional world.

What an erudite response.

 

[Moonglow]

Austerity isn’t even horrible economics, it’s a failed policy with no basis in reality. It’s out of paradigm. Every time austerity has been attempted, regardless of tax policy being recommended by the jackals over at the IMF, it's been an utter failure. The end result, as we’re seeing in the EU, is the atrophy of labor and capital, which pushes countries into depression. Again, for the SFC model challenged, if the government sector goes into surplus, the domestic private sector will go into deficit, similar to the situation we saw with Clinton in the 1990s, which caused private debt loads to skyrocket among other things. Also, just to make my point clearer, a deficit reduction is the fiscal equivalent of a tax increase, since both remove income from the economy.

Austerity was implemented after the depression of 1920/1921, government spending was drastically cut. The result? The boom of the 1920s.

And don't give me the claptrap about "that led to the depression". The depression was caused by an over expansion of the money supply, loose monetary policy.

Austerity was also implemented during the Great Depression and BOOM! Nothing happened....the Great Depression also occurred because of overproduction, under consumption...What did Hoover do after the Wall Street collapse?

Did he play austerity or did he try to implement the economy by boosting welfare and stimulus programs?

Which, no matter what happened, the fact that the US bankers were calling in short and long term loans to Europe and other parts of the world also created a world wide depression...

 

[Kimura]

Please provide an example of a country which implemented "austerity."

Since no one has "tried" austerity, you must agree that there is no evidence that it works. And I suppose you therefore have no objection to trying anything else, like the policies of the 1948--1970 period which produced the greatest period of growth in world history?

Many countries have tried austerity, some practice it today and it works wonders.

You mean success stories like Greece, Italy and Spain? Yeah, it's absolutely wonderful, if you enjoy watching your country's labor and capital whiter away into nothing.

 

[Rshermr]

Since no one has "tried" austerity, you must agree that there is no evidence that it works. And I suppose you therefore have no objection to trying anything else, like the policies of the 1948--1970 period which produced the greatest period of growth in world history?

Many countries have tried austerity, some practice it today and it works wonders.

You mean success stories like Greece, Italy and Spain? Yeah, it's absolutely wonderful, if you enjoy watching your country's labor and capital whiter away into nothing.

Funny how the right continues to make blanket statements like "austerity always works" but are universally unable to show actual cases where it has ever worked. Facts just seem to not matter. Agenda, however, does. Odd.