Europe's Populist Left

[Monoriu]

But the duke and the king are different people.

My point is that you talk about it and Orwell as if it's an awful thing. Austerity isn't necessarily a negative word. In the UK it's most associated with post-war austerity which isn't pre-war Orwellian Wigan. Post-war austerity had belt tightening and rationing, but also the creation of the NHS and the modern welfare state. The reason I think it's used a lot in the UK is because David Cameron, before 2010, explicitly invoked that era. He talked about a new 'age of austerity' and that era's ideal that 'we're all in it together'.

I agree that austerity doesn't accurately describe what's happened in Greece. Cuts to public spending of over 25% per capita go way, way beyond the merely austere and into the actively harmful, but there we go.

Edit: Also in a purely linguistic sense I think you're wrong. No-one is talking about an austere existence, but about the process of austerity. There's a difference.

But it seems obvious that Greece used to live way beyond their means.  In this context the cuts to public expenditure just brought them back to Earth.

[Barrister]

So the only way to escape "austerity" or worse is to put 14% of GDP on the credit card every year?

Do you genuinely think that credit card balances are a useful metaphor for understanding national budgets?

Yes.  Not absolutely perfect, but definitely very useful.

[Monoriu]

So the only way to escape "austerity" or worse is to put 14% of GDP on the credit card every year?

Do you genuinely think that credit card balances are a useful metaphor for understanding national budgets?

It is not that far fetched.

[Jacob]

Yes.  Not absolutely perfect, but definitely very useful.

Huh.

I thought pretty much all serious economists dismiss that metaphor as being ignorant and leading to erroneous conclusions.

... but I guess not?

[Eddie Teach]

Serious scholars are going to dismiss any analogy or model that regular people understand as overly simplistic. 

[Razgovory]

So the only way to escape "austerity" or worse is to put 14% of GDP on the credit card every year?

Do you genuinely think that credit card balances are a useful metaphor for understanding national budgets?

Yes.  Not absolutely perfect, but definitely very useful.

It was my impress that it was the opposite, as it gives misleading impressions.

[Jacob]

Serious scholars are going to dismiss any analogy or model that regular people understand as overly simplistic. 

It's more the "erroneous conclusions" bit that I'm concerned about.

[Monoriu]

Yes.  Not absolutely perfect, but definitely very useful.

Huh.

I thought pretty much all serious economists dismiss that metaphor as being ignorant and leading to erroneous conclusions.

... but I guess not?

Their reasoning is?

[Razgovory]

Yes.  Not absolutely perfect, but definitely very useful.

Huh.

I thought pretty much all serious economists dismiss that metaphor as being ignorant and leading to erroneous conclusions.

... but I guess not?

Their reasoning is?

The the word "debt" is only real commonality.  Governments don't generate revenue in the same way that most people do nor do most people print their own money.  Government also owes debt to itself and it's own people, very few people in the world owe credit card debt to credit card companies they own a significant stake in and while debt is almost always bad for individuals it is not that way for governments.

[Martinus]

My point is that the words austere and austerity have well-established meanings of frugal, bare-bones expenditure.  Because a duke lives less ostentatiously than a king doesn't make his existence austere; in exactly the same way a country running a 6% deficit is not living an austere existence just because they used to run a 9% deficit.

But how is the percentage of deficit in any way relevant to whether one is pursuing an austere policy? You yourself say in the first part of that paragraph that austerity relies on objective, rather than subjective criteria.

So, if you earn $20k per annum and you spend $30k per annum on a very small flat with only sub-standard amenities, cheap food and a medical treatment for your kid, surely you are living an austere life, despite running a 50% deficit, right? Conversely, if you earn $500k per annum, and you manage to save $200k you are most likely not living an austere lifestyle.

So why then go to say in the second part of your post that 6% deficit is by definition not austere. Wouldn't it depend on what your cost structure is?

[Martinus]

Yes.  Not absolutely perfect, but definitely very useful.

Huh.

I thought pretty much all serious economists dismiss that metaphor as being ignorant and leading to erroneous conclusions.

... but I guess not?

Their reasoning is?

What Raz said.

Also, governments can print money.

[Eddie Teach]

Generally, the kind of things governments can do that make the analogy fall short are considered highly undesirable. Printing the debt away, for instance, causes hyper-inflation.

Perhaps the best move would be the one that people would choose in the credit card scenario- just stop paying.

[Jacob]

Generally, the kind of things governments can do that make the analogy fall short are considered highly undesirable. Printing the debt away, for instance, causes hyper-inflation.

I'm no economist, but I thought things like reducing debt through (non-hyper-)inflation was not a bad thing, and basically just a fact.

I don't think quantitative easing, as recently practiced by the US, Japan, and now by the ECB have led to hyper-inflation either?

Perhaps the best move would be the one that people would choose in the credit card scenario- just stop paying.

What makes you say that's the best move?

[Razgovory]

Generally, the kind of things governments can do that make the analogy fall short are considered highly undesirable. Printing the debt away, for instance, causes hyper-inflation.

Perhaps the best move would be the one that people would choose in the credit card scenario- just stop paying.

The problem is a the very nature of the debt is different due the different nature of a person and a government.  A valid question would be what good is the credit card analogy in the first place?

[Eddie Teach]

Because I gather from Sheilbh that cutting their spending has wrecked their economy and from Yi that their debt continues to grow. Barring intervention from a rich benefactor(this does not mean new loans), bankruptcy seems to be the only way out.