Economic Argument for Austerity Based on Excel Error?

[Berkut]

Man, free spending liberals get really pissy when you criticize their religion. 

Indeed. What is sad is how you can't tell the qualitiative difference anymore between posts from DG and Raz and Seedy. They all basically have the same one trick pony as a response. ZOMG BERKUT IS SO ANGRY!!!LOLOLOLOL!!!!

[CountDeMoney]

I don't think you're angry.  I just think you don't know the difference between good deficits and bad deficits--it's all bad to you.  Which in itself is a one trick pony.

[Admiral Yi]

Not to my knowledge.  I've always noticed there are a lot more forced laughs when someone is backed in a corner.  Tell me Yi, does it bother you that the economic drum you were beating,  failed so catastrophically for the British?  That the rush to reduce deficit not only failed devastated economic growth but didn't actually cut deficit spending?

We've been over this before.  And I assume we'll go over it again.  And again.

I've read about a quarter of The Road to Serfdom.  I didn't encounter a single economic statistic.  I've read a few chapter of A General Theory.  I didn't encounter a single economic statistic there either.  If the absence of statistics in one proves that the author disregards data that conflicts with his theory, then it follows that the same is true for the other.

If your critique of the Austrian school is that Glenn Beck predicted runaway hyperinflation because of the Fed's easy money policy, which obviously hasn't come to pass, then the response is that Ann Applebaum, who is an actual economist rather than a weirdo talk show host, predicted 860 billion in stimulus would return us to full employment and positive growth in one quarter, which didn't happen either.  Does that "disprove" Keynesianism?  Of course not.

[Razgovory]

Man, free spending liberals get really pissy when you criticize their religion. 

Indeed. What is sad is how you can't tell the qualitiative difference anymore between posts from DG and Raz and Seedy. They all basically have the same one trick pony as a response. ZOMG BERKUT IS SO ANGRY!!!LOLOLOLOL!!!!

If everyone is commenting on your crazy behavior in all likelihood the problem doesn't lie in everyone else.

[Razgovory]

Not to my knowledge.  I've always noticed there are a lot more forced laughs when someone is backed in a corner.  Tell me Yi, does it bother you that the economic drum you were beating,  failed so catastrophically for the British?  That the rush to reduce deficit not only failed devastated economic growth but didn't actually cut deficit spending?

We've been over this before.  And I assume we'll go over it again.  And again.

I've read about a quarter of The Road to Serfdom.  I didn't encounter a single economic statistic.  I've read a few chapter of A General Theory.  I didn't encounter a single economic statistic there either.  If the absence of statistics in one proves that the author disregards data that conflicts with his theory, then it follows that the same is true for the other.

If your critique of the Austrian school is that Glenn Beck predicted runaway hyperinflation because of the Fed's easy money policy, which obviously hasn't come to pass, then the response is that Ann Applebaum, who is an actual economist rather than a weirdo talk show host, predicted 860 billion in stimulus would return us to full employment and positive growth in one quarter, which didn't happen either.  Does that "disprove" Keynesianism?  Of course not.

You know that "I read a couple of chapters of two books and saw an equal number of statistics" is one of the least compelling arguments I've ever read.  The Austrian school is notorious for it's dislike of mathematical models.  That's what I was getting at.

Your stuff about Glenn Beck and Applebaum (She's an economist?  I thought she was just a poor historian), is lost on me.  The failure I was talking about the deficit cutting scheme that failed in Britain and similar schemes pushed pushed by people like Paul Ryan.

[Neil]

Remember, the US is wasting $150 billion every year by allowing the USAF to exist.

[Admiral Yi]

The Austrian school is notorious for it's dislike of mathematical models.  That's what I was getting at.

This is a change from your previous characterization.  Before you were claiming that members of the Austrian school disregarded empirical observations that contradicted their theories.

Your stuff about Glenn Beck and Applebaum (She's an economist?  I thought she was just a poor historian), is lost on me.  The failure I was talking about the deficit cutting scheme that failed in Britain and similar schemes pushed pushed by people like Paul Ryan.

You may be right.  Either way, someone in the White House (Goolsby?) made that prediction and it didn't come true.

Not really sure how you can describe a budget proposal that was never enacted (Ryan's) as a failure in terms of maintaining American credit-worthiness.  Are we talking about an alternate universe?

Your description of British austerity as a failure is a little puzzling as well.  The testable hypothesis is whether there is a causal relationship between national indebtedness and risk premia.  You seem to be claiming that since Britain cut spending and the deficit increased as a % of GDP that "disproves austerity." 

As a side note, the usage of the term austerity has become sort of ridiculous.  If you're spending 10% more than you earn and you drop that to "only" 6% more than you earn, that's not "austere."  That's spending more than you earn.

[Berkut]

I don't think you're angry.  I just think you don't know the difference between good deficits and bad deficits--it's all bad to you.  Which in itself is a one trick pony.

I don't think that is my issue at all. It isn't about good and bad, it is about what is the actual motivation for deficits. My issue is not whether it is good or bad, it is that as far as I can tell, the position of people like you is that there is no such thing as a bad deficit. I've never once heard your type say that there is a time for restraint.

This isn't, for me, about what the money is used for, it is that this is just another example of the lefts tendency to only ever look at half the equation. They only ever look at what the desirability of spending money might be, and never at the capability of generating that money to begin with. The assumption is that as long as you can justify the want/need/desire to spend, the ability to actually spend is irrelevant.

Which is why the debate is almost always emotional in nature. It is always "Oh, you want poor people to starve? You want to take away health care from children? You want old people to have to eat cat food?". It is never, from what I can see, a rational and reasoned discussion about how best to spend what we can afford to pay for social services.


Now we've taken that position to the extreme. It seems to me that the argument has become that we CANNOT spend too much - that deficit spending, in an of itself, is some kind of noble goal that through the magic of economics somehow puts all of economic history on hold, because THIS time it is different.

[Sheilbh]

As a side note, the usage of the term austerity has become sort of ridiculous.  If you're spending 10% more than you earn and you drop that to "only" 6% more than you earn, that's not "austere."  That's spending more than you earn.

I'll come back here later, but this interests me.

I think you're totally wrong on your point but the use of austerity is odd. I'm really surprised the word's gone global because for me I think it's from British English from the war. 1940s Britain is known as 'austerity Britain'. In this country I think both sides of the argument have referenced the sort of ideas of that time. So it seems natural that we'd describe it in those terms. But it's a word of particular meanings here which are a bit distinct from simple fiscal consolidation, which is the IMF's favoured phrase.

I think it's really interesting and a bit unusual that it's now entered into the way Americans talk about things. I don't know if maybe that's always how budget cuts/tax rises have been referred to over there or if it's new?

[Admiral Yi]

New.  It's always been deficit reduction, shrinking the deficit, getting the budget under control, etc.

[Sheilbh]

New.  It's always been deficit reduction, shrinking the deficit, getting the budget under control, etc.

Yeah, that was my impression. What would you use to describe other periods of austerity in US history, say 1937 or the post WW1 retrenchment?

[Admiral Yi]

37?

I dont' think you call post WWI anything.  "The end of war time spending?"

[Sheilbh]

37?

Yep. The US got worried about deficits and cut spending by about 20% over two years. Unemployment shot back up, the stock market fell again and the economy, at best, stagnated. It and the Japanese in the late 90s are the normal examples of premature tightening having a dreadful effect.

[MadImmortalMan]

37?

I dont' think you call post WWI anything.  "The end of war time spending?"

The government's big spending cuts of the early 20's were not a disarmament. They were a direct response to the depression that immediately followed the war. I don't think we can replicate the results they got because they had a hyper-inflationary Europe to compete with and the flow of gold across the Atlantic running away from that created a largely expansionary monetary base in the US.

[DGuller]

Man, free spending liberals get really pissy when you criticize their religion. 

Indeed. What is sad is how you can't tell the qualitiative difference anymore between posts from DG and Raz and Seedy. They all basically have the same one trick pony as a response. ZOMG BERKUT IS SO ANGRY!!!LOLOLOLOL!!!!

  Seriously?  This is the first time I made a "Berkut is so angry" post in probably many months, and it's instantly part of the pattern?  Yeah, I'm not buying what you're selling.