R.I.P. UK

[Eugene]

http://www.nytimes.com/2010/06/23/world/europe/23britain.html?src=me

Fox-controlled WSJ already has an editorial that sings praises to this highly illogical decision by the British government.

Hopefully, as the UK falls into a severe double-dip recession, this will finally prove once and for all that Keynesian economics works, and illogical austerity moves in the face of an economy that operates well below capacity and a zero interest bound, don’t.

Not much point debating this now, but we’ll check back in a year.

[CA renter]

From the link:

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government’s plan to sharply reduce the country’s $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.
———————

As much as I favor pulic sector unions and social safety nets, I think what they’ve described above makes perfectly good sense, but I would also cut spending on foreign aid (not being cut in the proposed budget). I would also raise taxes on capital gains rather than increase the VAT.

Yes, these measures will result in a recession; but why do people think the economy is only supposed to go in one direction (up) for all eternity? Recessions are sometimes necessary to correct imbalances (like bubbles!) and reallocate capital to more productive and useful sectors.

No matter what, we’re going to have to pay for the excesses and misallocations of the past few decades. Might as well get it over with as quickly as possible. The first one to cleanse will be the first one to prosper when the time is right, IMHO.

[CA renter]

From the link:

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government’s plan to sharply reduce the country’s $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.
———————

As much as I favor pulic sector unions and social safety nets, I think what they’ve described above makes perfectly good sense, but I would also cut spending on foreign aid (not being cut in the proposed budget). I would also raise taxes on capital gains rather than increase the VAT.

Yes, these measures will result in a recession; but why do people think the economy is only supposed to go in one direction (up) for all eternity? Recessions are sometimes necessary to correct imbalances (like bubbles!) and reallocate capital to more productive and useful sectors.

No matter what, we’re going to have to pay for the excesses and misallocations of the past few decades. Might as well get it over with as quickly as possible. The first one to cleanse will be the first one to prosper when the time is right, IMHO.

[CA renter]

From the link:

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government’s plan to sharply reduce the country’s $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.
———————

As much as I favor pulic sector unions and social safety nets, I think what they’ve described above makes perfectly good sense, but I would also cut spending on foreign aid (not being cut in the proposed budget). I would also raise taxes on capital gains rather than increase the VAT.

Yes, these measures will result in a recession; but why do people think the economy is only supposed to go in one direction (up) for all eternity? Recessions are sometimes necessary to correct imbalances (like bubbles!) and reallocate capital to more productive and useful sectors.

No matter what, we’re going to have to pay for the excesses and misallocations of the past few decades. Might as well get it over with as quickly as possible. The first one to cleanse will be the first one to prosper when the time is right, IMHO.

[CA renter]

From the link:

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government’s plan to sharply reduce the country’s $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.
———————

As much as I favor pulic sector unions and social safety nets, I think what they’ve described above makes perfectly good sense, but I would also cut spending on foreign aid (not being cut in the proposed budget). I would also raise taxes on capital gains rather than increase the VAT.

Yes, these measures will result in a recession; but why do people think the economy is only supposed to go in one direction (up) for all eternity? Recessions are sometimes necessary to correct imbalances (like bubbles!) and reallocate capital to more productive and useful sectors.

No matter what, we’re going to have to pay for the excesses and misallocations of the past few decades. Might as well get it over with as quickly as possible. The first one to cleanse will be the first one to prosper when the time is right, IMHO.

[CA renter]

From the link:

Only health and international aid spending would be protected from the 25 percent cuts for government departments by 2015, the steepest fiscal spending reductions since the 1930s. Mr. Osborne also announced a two-year wage freeze for all but the lowest paid among Britain’s six million public servants and a three-year freeze on benefits paid to parents for rearing children, in addition to new medical screening for people claiming disability benefits, part of a bid to cut $16 billion from the annual welfare budget.

Mr. Osborne also announced a raft of tax increases, though he was at pains to say that the government’s plan to sharply reduce the country’s $1.4 trillion national debt would rest on making roughly four pounds in spending cuts for every pound in tax increases, a point of considerable political weight in a country that is already among the highest-taxed in Europe.
———————

As much as I favor pulic sector unions and social safety nets, I think what they’ve described above makes perfectly good sense, but I would also cut spending on foreign aid (not being cut in the proposed budget). I would also raise taxes on capital gains rather than increase the VAT.

Yes, these measures will result in a recession; but why do people think the economy is only supposed to go in one direction (up) for all eternity? Recessions are sometimes necessary to correct imbalances (like bubbles!) and reallocate capital to more productive and useful sectors.

No matter what, we’re going to have to pay for the excesses and misallocations of the past few decades. Might as well get it over with as quickly as possible. The first one to cleanse will be the first one to prosper when the time is right, IMHO.

[Zeitgeist]

I concur. Let the bloodletting begin.

[Zeitgeist]

I concur. Let the bloodletting begin.

[Zeitgeist]

I concur. Let the bloodletting begin.

[Zeitgeist]

I concur. Let the bloodletting begin.

[Zeitgeist]

I concur. Let the bloodletting begin.

[Arraya]

Not trying to start a keynesian verse austerity flame war, the tempo and mechanisms of destruction are irrelevant, just showing a rift beginning between germany and the US

http://www.zerohedge.com/article/germany-us-rift-gets-deeper-merkel-openly-mocks-obamas-keynesian-guidelines
The transatlantic smackdown is getting vicious, as Angela Merkel makes a point to demonstrate her refusal to follow Obama’s policies before a business audience in Berlin. As Bloomberg reports, “Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
More from Bloomberg:

snip

The G-20 must “safeguard and strengthen” the economic recovery and promote “global demand growth that avoids the imbalances of the past,” Obama said in a June 16 letter to fellow G-20 leaders. He expressed concern about “heavy reliance on exports by some countries,” which he didn’t name. Treasury Secretary Timothy F. Geithner called on June 5 for “stronger domestic demand growth” in European countries like Germany that have trade surpluses.
The upcoming G-20 meeting will likely be very contentious:

Merkel said on June 11 that she expects to have a “hard time” from fellow leaders at the G-20 meeting, where Germany and France are leading Europe’s push for a global commitment to impose bank levies and a tax on financial transactions.

The G-20 faces a test of unity on the banking levy, a German government official said earlier today, warning that leaders can either pull together or split into two camps over the tax. The official spoke to reporters on condition of anonymity.
And the punchline:

Obama’s appeal “isn’t anything that goes against what we are doing,” Merkel told reporters yesterday. “If we don’t get onto a path of sustainable economic growth but have rather a growth bubble, then if the next crisis comes we won’t be able to pay for it.”

[Arraya]

Not trying to start a keynesian verse austerity flame war, the tempo and mechanisms of destruction are irrelevant, just showing a rift beginning between germany and the US

http://www.zerohedge.com/article/germany-us-rift-gets-deeper-merkel-openly-mocks-obamas-keynesian-guidelines
The transatlantic smackdown is getting vicious, as Angela Merkel makes a point to demonstrate her refusal to follow Obama’s policies before a business audience in Berlin. As Bloomberg reports, “Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
More from Bloomberg:

snip

The G-20 must “safeguard and strengthen” the economic recovery and promote “global demand growth that avoids the imbalances of the past,” Obama said in a June 16 letter to fellow G-20 leaders. He expressed concern about “heavy reliance on exports by some countries,” which he didn’t name. Treasury Secretary Timothy F. Geithner called on June 5 for “stronger domestic demand growth” in European countries like Germany that have trade surpluses.
The upcoming G-20 meeting will likely be very contentious:

Merkel said on June 11 that she expects to have a “hard time” from fellow leaders at the G-20 meeting, where Germany and France are leading Europe’s push for a global commitment to impose bank levies and a tax on financial transactions.

The G-20 faces a test of unity on the banking levy, a German government official said earlier today, warning that leaders can either pull together or split into two camps over the tax. The official spoke to reporters on condition of anonymity.
And the punchline:

Obama’s appeal “isn’t anything that goes against what we are doing,” Merkel told reporters yesterday. “If we don’t get onto a path of sustainable economic growth but have rather a growth bubble, then if the next crisis comes we won’t be able to pay for it.”

[Arraya]

Not trying to start a keynesian verse austerity flame war, the tempo and mechanisms of destruction are irrelevant, just showing a rift beginning between germany and the US

http://www.zerohedge.com/article/germany-us-rift-gets-deeper-merkel-openly-mocks-obamas-keynesian-guidelines
The transatlantic smackdown is getting vicious, as Angela Merkel makes a point to demonstrate her refusal to follow Obama’s policies before a business audience in Berlin. As Bloomberg reports, “Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
More from Bloomberg:

snip

The G-20 must “safeguard and strengthen” the economic recovery and promote “global demand growth that avoids the imbalances of the past,” Obama said in a June 16 letter to fellow G-20 leaders. He expressed concern about “heavy reliance on exports by some countries,” which he didn’t name. Treasury Secretary Timothy F. Geithner called on June 5 for “stronger domestic demand growth” in European countries like Germany that have trade surpluses.
The upcoming G-20 meeting will likely be very contentious:

Merkel said on June 11 that she expects to have a “hard time” from fellow leaders at the G-20 meeting, where Germany and France are leading Europe’s push for a global commitment to impose bank levies and a tax on financial transactions.

The G-20 faces a test of unity on the banking levy, a German government official said earlier today, warning that leaders can either pull together or split into two camps over the tax. The official spoke to reporters on condition of anonymity.
And the punchline:

Obama’s appeal “isn’t anything that goes against what we are doing,” Merkel told reporters yesterday. “If we don’t get onto a path of sustainable economic growth but have rather a growth bubble, then if the next crisis comes we won’t be able to pay for it.”

[Arraya]

Not trying to start a keynesian verse austerity flame war, the tempo and mechanisms of destruction are irrelevant, just showing a rift beginning between germany and the US

http://www.zerohedge.com/article/germany-us-rift-gets-deeper-merkel-openly-mocks-obamas-keynesian-guidelines
The transatlantic smackdown is getting vicious, as Angela Merkel makes a point to demonstrate her refusal to follow Obama’s policies before a business audience in Berlin. As Bloomberg reports, “Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.
More from Bloomberg:

snip

The G-20 must “safeguard and strengthen” the economic recovery and promote “global demand growth that avoids the imbalances of the past,” Obama said in a June 16 letter to fellow G-20 leaders. He expressed concern about “heavy reliance on exports by some countries,” which he didn’t name. Treasury Secretary Timothy F. Geithner called on June 5 for “stronger domestic demand growth” in European countries like Germany that have trade surpluses.
The upcoming G-20 meeting will likely be very contentious:

Merkel said on June 11 that she expects to have a “hard time” from fellow leaders at the G-20 meeting, where Germany and France are leading Europe’s push for a global commitment to impose bank levies and a tax on financial transactions.

The G-20 faces a test of unity on the banking levy, a German government official said earlier today, warning that leaders can either pull together or split into two camps over the tax. The official spoke to reporters on condition of anonymity.
And the punchline:

Obama’s appeal “isn’t anything that goes against what we are doing,” Merkel told reporters yesterday. “If we don’t get onto a path of sustainable economic growth but have rather a growth bubble, then if the next crisis comes we won’t be able to pay for it.”

[Author]

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