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Austerity is living within one’s income while saving for future needs and growing one’s income.
dont be misguided.austerity is the new head game.it’s called demoralize ones self worth. next, the retirement age will be a hundred,and then they will go on to tell you that people live that long because of an advancement in medicine,and people like you will believe them.
good thought drummer, im wondering how pension funds will be suported, as boomers retire.
except in the case of governments, your own spending affects, directly, your own income.
thats how the world is going to get itself in a long, miserable quagmire… people insist on thinking of the US gov’t or the Eurozone as a whole in the same way they think of a household. The finances of the US gov’t (or UK gov’t, or Eurozone as a whole, if they could actually organize themselves) are nothing like the finances of you and I.
If I decide to “tighten my belt” it doesn’t directly and enormously affect my income, it does for the government. Second, and most importantly, the government can create currency (and this is fundmanetally necessary for ever higher levels of economic activity, which the world is accustomed to). If we started a society tomorrow with 1000 people and a million coins, maybe that works great. But somewhere down the road, if that society grew to 10,000 people and GDP had risen 15 times, we’re probably going to need more coins.
I have spent my whole life self righteously hating on government spending, perceiving it as helping “those other guys”, but not me. But the fact of the matter is that everybody benefits from a better economy.
You make no distinction between public and private sector spending, which, in capsule, means that Steve Jobs inventing the Apple computer and investing in it’s production is the same as taking money from Steve Jobs (or borrowing from his future taxes) in order to redistribute money inefficiently (either through a dole or by financing net present value loser projects)…
By ignoring financial reality, you sink your own thesis. Gov’t spending crowds out private sector spending until there’s nothing left but the gov’t.
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thats not true at all, Jake. If not in the comment above I have many times noted that government spending isn’t economically inefficient. I just note in my various comments the facts that government deficits are the only way to create more dollars, that gov’t spending does eventually create increased aggregate demand which then benefits each business, including apple.
Above I note that government spending affects government revenue.
I think drummerboy has got it right.
Furthermore the spending that took place was by corrupted officials taking bribes form the IMF and World Bank.
Doesn’t matter what you call it… there’s only one way out when you haven’t got the dough, or the borrowing capacity.
They could always sell Corfu, but “austerity” usually demands restructuring. If they keep the current schlerotic state in place even as they cut back on services and assistance, well, they really aren’t getting the message or their leaders don’t give a shit.
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the problem there is that they only manufacture tourism.all else is just food stuffs really.you can’t do worldwide trade on just foodstuffs.pretty much a net importer of most hard goods. all they can do is default
What about shipping? They’ve got a lot of important industries.
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They’ve got a lot of important industries and some of them, like clothing and luxury goods, have margins almost as good as software: http://www.ft.com/intl/cms/s/0/ab98f3b4-2417-11e0-a89a-00144feab49a.html#axzz1YV3khShE
I hope they can pull this out and restructure in a way that offers some hope for the kids there. As it is, I think anyone with any money or education will look to establish a life and career somewhere else. But Italy is a great country. Lots of potential if they can get through this period.
At what point will the world sit down and realize that austerity is doomed to fail?
I don’t look at it as “austerity,” I look at it as allowing a re-pricing of overvalued assets. The gov’t supported labor practices in Greece are unsustainable, as reality illustrates. What to do? Print euros to save it?
Ridiculous.
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whats your prescription for hte situation, jake? tell me?
and, riddle me this, if we went to a gold standard and found an enormous reserve of gold somewhere in yosemite national park, enough to meaningfully increase the money supply, would that ruin the world the way that printing euros would? 😉
It would be a temporary flux in the pricing of the currency, not a never ending splurge like we see today. You have to admit, scarcity has it’s benefits.
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