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An End To Austerity?

Tyler Durden's picture




 

Submitted by Mark Thornton via the Ludwig von Mises Institute,

President Barack Obama has recently released his budget in which he calls for an “end of austerity.” This is an amazing statement from a president whose government has spent the highest percentage of GDP in history and added more to the national debt than all past presidents combined. What must he mean by austerity?

There are demonstrations around the world over austerity on an almost daily basis. It is condemned as an evil poison for tough economic times while others tout it as the elixir for economic depressions.

The president’s rejection of austerity represents the Keynesian view which completely rejects austerity in favor of the “borrow and spend” — increase aggregate demand — approach to recession. What he really is rejecting is the infinitesimal cutbacks in the rate of spending increases and the political roadblocks to new spending programs.

While the 2009-2012 budgets have been relatively flat, they are still more than 15 percent higher than in 2008 and 75 percent higher than in the previous decade. This four year leap in spending was financed with a $5 trillion increase in the national debt. No austerity here!

The type of austerity that gets the most worldwide press attention on a daily basis is that promoted by economists at the International Monetary Fund. This “austerian” approach involves cutbacks in government services and tax increases on the beleaguered public in order to, at all costs, repay the government’s corrupt creditors. This pro-bankster approach is what generates a massive amount of media attention and sometimes violent demonstrations.

Austrian School economists reject both the Keynesian stimulus approach and the IMF-style high-tax, pro-bankster approach as counterproductive. Although “Austrians” are often lumped in with “Austerians,” Austrian School economists support real austerity. Real austerity involves cutting government budgets by reducing salaries, employee benefits, and retirement benefits. It also involves selling government assets and even repudiating government debt. Instead of increasing taxes, the Austrian approach advocates decreasing taxes.

Despite all the hoopla in countries like Greece, there is no real austerity except in the countries of Eastern Europe. For example, Latvia is Europe’s most austere country and also one of the fastest growing economies. Estonia implemented an austerity policy that depended largely on cuts in government salaries. In contrast there simply is no significant austerity in most of Western Europe or the U.S. As Professor Philipp Bagus explains, “the problem of Europe (and the United States) is not too much but too little austerity — or its complete absence.”

Real austerity for individuals means living a highly restricted lifestyle. The best example is the monk who lives on a subsistence-level diet, wears simple clothing, possesses a few basic pieces of furniture, and uses only necessary utensils. His days consist of long hours of work and prayer with no leisure activities and he may not even enjoy indoor heating or plumbing.

Austerity applied to whole countries, is not necessarily so harsh or ascetic. It simply means that the government has to live within its means.

If government were to adopt a thoroughgoing “Libertarian Monk” lifestyle, then the national government would be cut back to only national defense without standing armies and nuclear weapons. The national debt would be wholly repudiated. This would involve certain short-run hardships, although much greater long-run prosperity.

In contrast, the typical austerity policy is not severe. Government employees would be given cuts in wages, benefits, and retirement benefits necessary to balance the budget. The biggest cuts would fall on politicians, appointees, and senior bureaucrats. Given that such cutbacks occur when most everyone is facing cutbacks and hardships and given that government employees are typically very well compensated, it is not unreasonable to expect them to bear most of the burden of an austerity policy.

One particularly promising area for cutbacks is government regulation. Regulation is a burden on taxpayers, discourages entrepreneurship, and makes us less safe. One recent empirical study found that regulation was extremely costly and that “eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually.”

Real austerity actually works best with tax cuts. To help austerity create growth it needs to be understood that certain taxes are highly discouraging to production. Tax cuts on investment and capital in contrast stimulate economic activity and production.

IMF-inspired tax increases make no sense. In hard times, government policies should be guided by the idea of increasing production, not of making production more burdensome via higher taxes. In much the same way, our ascetic monk does not force his duties and burdens on ordinary citizens.

President Obama has also suggested higher taxes (again) this time such as the removal of “tax breaks” for the retired rich. This would be the first step toward robbing our IRAs. Some have even suggested that “austerity” should involve extending existing taxes onto charities and nonprofits. Others have suggested taking away the tax-exempted status of charities and non-profits, which is nothing but a backdoor tax increase. These are some of the dumbest suggestions, especially in economic crises and are not real austerity.

Austerity does not mean, for example, budget cuts that would eliminate garbage collection or shutting down the fire department while leaving the military, education, and the spy state untouched. This is just a form of extortion that does not solve the problem. It only reveals the true nature and intent of those who work in government.

The Keynesian stimulus approach does not work. The IMF-inspired austerian approach also does not work. Only real austerity works. This means cutting government employee incomes, benefits, and retirement benefits. This alone would encourage them to run a tighter ship in the future. Eliminating regulators and regulations, cutting taxes, and selling government assets would all aid in the recovery process.

President Obama and Congress should get busy doing what is best for the economy and the American public instead of enriching themselves and those who feed at the public trough.

 

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Sun, 03/09/2014 - 15:05 | 4528096 sgt_doom
sgt_doom's picture

Feed at the public trough?

Oh, you mean JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, Wells Fargo, GE, Blackrock, Blackstone Group, Carlyle Group, AT&T, ExxonMobil . . . .

Yup, too many bottom feeders.

Sun, 03/09/2014 - 15:07 | 4528099 TruthInSunshine
TruthInSunshine's picture

End to Austerity =

A continued attempt to paint a fictional narrative of "recovery," told by monkeys printing massive reams of fiat paper, in order to reflate asset bubbles & get the serfs to assume/consume MOAR debt - and if the individual is reluctant to awesome more debt, the financial entities that own "sovereign governments" will force their government puppets to assume more debt (and pay outlandish prices on things that are not needed) & try to shift the burden to said individual (via taxation, present & future).

It's all nothing but a simple illusion, created by the oldest method in the fractional fiat reserve bankster's playbook, and it will inevitably lead to the next, bigger "popping" sound.

It's on continuous loop, now.

"Debt is the money of slaves."

There are more & more debt slaves with each & every passing day.

Sun, 03/09/2014 - 15:09 | 4528103 cossack55
cossack55's picture

Nice

Sun, 03/09/2014 - 15:14 | 4528116 Anusocracy
Anusocracy's picture

How about austerity where government is paid for voluntarily?

Real austerity created by real freedom.

Sun, 03/09/2014 - 15:17 | 4528124 economics9698
economics9698's picture

Obama has spent 25.2%, 24.1%, 24.1%, 22.8%, 22.7%, and a projected 22.2% of the GDP.  Historically any spending over 18% will be a deficit, period.

 

Government waste about 55 cents on the dollar, the private sector must make $1 plus inflation, plus a profit or go out of business.

In other words Obama wants the recession to last for as long as he is in office.

The secret to the high growth rate of the Eisenhower years (despite a 91% top tax rate) was the guy almost never spent more than 18% of the GDP on the federal government.

Sun, 03/09/2014 - 15:46 | 4528193 Dick Buttkiss
Dick Buttkiss's picture

"How about austerity where government is paid for voluntarily?"

B-b-but that would mean that government would be so small it couldn't do all the good it does for the few by taking so much from the many, then bribing the many with goodies paid for out of money printed ex nihilo that is then lent to the many in order to turn them into endlessly-consuming debt slaves that do further good for the few!

Wait what?

Sun, 03/09/2014 - 15:58 | 4528222 Beam Me Up Scotty
Beam Me Up Scotty's picture

"(despite a 91% top tax rate)"

No one paid 91%.  Period.  There were a raft of loopholes etc, and no one actually paid that rate.  Tax and spenders love to use that as proof high taxation provides a strong economy.  Its BUNK.  WHO would pay that kind of rate?  You seriously think anyone is going to work when .gov takes 9 out of 10 days of your labor?  Its bad enough now, its probably 7 out of 10 days of your labor when you add your Fed, state, and local income taxes, property taxes, sales taxes, fees and licenses in.  Hell, maybe it is already 90% of a persons income.  Thats why no one wants to work anymore.

Sun, 03/09/2014 - 16:11 | 4528247 economics9698
economics9698's picture

I know that.  That was in there for the Robert Reich zombies who think the reason for the high growth rates was the "sharing of wealth” kumbya during the Eisenhower years.

Although there could be a case made that Elvis and Marylyn paid the 91%. /sarc

Sun, 03/09/2014 - 17:57 | 4528521 Keyser
Keyser's picture

This administration wouldn't know austerity if it jumped up and slapped them silly. The fact that they used austerity as  talking point in an Oblamo speech not only shows their hubris, but their determination to spend the US into oblivion. Stack on. 

 

Sun, 03/09/2014 - 17:34 | 4528452 moneybots
moneybots's picture

"The secret to the high growth rate of the Eisenhower years (despite a 91% top tax rate) was the guy almost never spent more than 18% of the GDP on the federal government."

 

The U.S. was producer to the world when Eisnhower was President.  Those days are long gone.

Sun, 03/09/2014 - 16:35 | 4528295 A Nanny Moose
A Nanny Moose's picture

No force? Then it wouldn't be government

Sun, 03/09/2014 - 15:15 | 4528120 macholatte
macholatte's picture

 

....cutbacks in the rate of spending increases...

meaningless drivel to the sheeple

Sun, 03/09/2014 - 15:15 | 4528118 chunga
chunga's picture
The Essence Of The Banking Industry...

http://www.youtube.com/watch?v=2B_SxGmSJP0

Sun, 03/09/2014 - 16:02 | 4528230 RafterManFMJ
RafterManFMJ's picture

Austerity is for the middle class; those above and below FUCKIN PARTY ON!!

Sun, 03/09/2014 - 15:38 | 4528165 RaceToTheBottom
RaceToTheBottom's picture

Article doesn't mention MIC and WS?  Or are those included when they mean Government must reduce. 

Makes sense MIC and WS act as government without the General Services (GS- ranking) payment constraints....

Sun, 03/09/2014 - 15:09 | 4528105 agent default
agent default's picture

What a load of crap. "Real austerity for individuals means living a highly restricted lifestyle."  Bullshit.  Real austerity means the government cuts spending, and lowers dramatically taxes.  It is government spending and stifling of the private sector through over regulation and over taxation that lead to the problems we see today.

Sun, 03/09/2014 - 15:16 | 4528122 TruthInSunshine
TruthInSunshine's picture

Governments are owned by monopolistic entities, and they will tax their citizens to buy whatever and how much "stuff" - mostly unecessary & worthless - that these monopolistic Money Masters instruct their government puppets to purchase.

Governments then accrue larger national debts, in the form of higher present and future levels of taxation upon the real builders of wealth, increasingly sucking these real businesses & people dry (until the incentive to produce anything of value is outweighed by government bloodletting).

That's how CronyCapitalism works.

Sun, 03/09/2014 - 15:27 | 4528147 ebworthen
ebworthen's picture

They're only stifling small businesses owned by individuals.

Don't you know that the Supine Kangaroo Court decreed corporations "individuals"?

This means that individuals (We the People) are now Serfs, serving the kleptoligarchy.

Welcome to the machine.

Sun, 03/09/2014 - 20:00 | 4528876 Milestones
Milestones's picture

Interesting legalites this "corporations are individuals" decree from the high court. If you and I can buy stock in the xyz corporation does it not fallow that the 13th Amendment to the U.S. Constitution which prohibits anyone from owning  people be somewhat awkward to explain to your kids. I mean owning a part of a people (person) and all !! 

Gee Wiz, silly me.               Milestones

Sun, 03/09/2014 - 16:01 | 4528224 WMM II
WMM II's picture

" It is government spending and stifling of the private sector through over regulation and over taxation that lead to the problems we see today."

 

disagree.

it was specifically the deregulation of the banks that accomplished the distortions and sufferings that stole the savings of everyday people and forced them to pay artificially high prices for commodities to boot.

 

:)

wmm

Sun, 03/09/2014 - 18:08 | 4528555 Dick Buttkiss
Dick Buttkiss's picture

Sorry, WMM II, but you can't dergulate that which is above regulation by design and is in fact corrupt to its very core:

https://www.youtube.com/watch?v=lu_VqX6J93k

Sun, 03/09/2014 - 19:49 | 4528844 WMM II
WMM II's picture

thanks for your thoughts.

 

until 2000, the rules seperated banking from 'shadow' banking. therewithin lies the root, as i see it. aka tossing out glass-steagall.

 

 

:)

wmm

Sun, 03/09/2014 - 20:43 | 4529009 Dick Buttkiss
Dick Buttkiss's picture

What Glass-Steagall separated was two sides of the same rapacious system, about which Henry Ford had this to say way back when:

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

In other words, not only did Henry Ford know how corrupt the system already was — i.e., back when it was innocent by comparison — he, being the oligarch that he was, approved of the fact that the "people of the nation" didn't understand it.

And on it has gone ever since.

Until it doesn't.

Sun, 03/09/2014 - 15:10 | 4528106 djsmps
djsmps's picture

The good times are comin'!

Sun, 03/09/2014 - 19:29 | 4528796 LooseLee
LooseLee's picture

Yup; Dow 4000, S&P 400, and NAS 1000 will allow good times to once again be possible...

Sun, 03/09/2014 - 15:16 | 4528121 ebworthen
ebworthen's picture

It's a nice idea, and morally and ethically sound, but 101 years too late.

There is no reaason I or any other citizen should suffer austerity or a monk's lifestyle while banks and corporations are bailed out, $1 Billion taxpayer obilgations is sent to a putsch in Ukraine, and The Constitution is being raped.

The whole thing needs to be torn down and rebuilt and I'm not going to live like a monk so it takes longer to collapse or so Washington D.C. and Wall Street can live high on the hog.

Bleed the beast.

Kill the beast.

Sun, 03/09/2014 - 15:35 | 4528169 RaceToTheBottom
RaceToTheBottom's picture

"... with liberty and QE for all"

Sun, 03/09/2014 - 20:10 | 4528910 Milestones
Milestones's picture

Joan of Arc always pop into my head in this coicumstance.                        Milestones

Sun, 03/09/2014 - 20:12 | 4528912 Milestones
Milestones's picture

CIRCUMSTANCE--you heathen.             Milestones

Mon, 03/10/2014 - 00:20 | 4529532 Greg
Greg's picture

Just reduce what you earn and starve the beast of revenue.

Sun, 03/09/2014 - 15:25 | 4528141 Duc888
Duc888's picture

 

 

 

....common core math.  That's gotta be it.  No other explanation.

Sun, 03/09/2014 - 15:31 | 4528148 RaceToTheBottom
RaceToTheBottom's picture

In the Keynesian view of the world, austerity only comes after the recovery and growth has been achieved....

I would have thought the recovery would feel better.....

Or does that mean that since the austerity is ending, we are having Keynes II?  Or is that QE4?

The numbers are so confusing.  Maybe QE 4ever is the best

 

LOL

Sun, 03/09/2014 - 16:03 | 4528231 Beam Me Up Scotty
Beam Me Up Scotty's picture

And they are all full of shit too.  Austerity for government NEVER comes.  When the "recovery" comes, they will spend even MORE.  Their is an infinite amount of wants and a finite supply of labor to finance it all.  Someone needs to tell these big spending idiots NO MORE SPENDING.  Just like a spoiled child in the grocery store who cries when he can't get a candy bar.  Spoiled rotten babies is all they are.

Sun, 03/09/2014 - 15:28 | 4528149 zebrasquid
zebrasquid's picture

Fresh Prince of Bill Ayers.

Sun, 03/09/2014 - 15:59 | 4528225 TheFourthStooge-ing
TheFourthStooge-ing's picture

Fresh Prints of Ben's Heirs

Sun, 03/09/2014 - 15:32 | 4528160 Walt D.
Walt D.'s picture

"President Obama and Congress should get busy doing what is best for the economy and the American public instead of enriching themselves and those who feed at the public trough."

More Marxist drivel. President Obama and the Congress could not run an ice cream van in a heat wave at a ball game. The best thing they can do is to get out of the f**ing way. Central planning does not work.

Sun, 03/09/2014 - 16:20 | 4528268 RafterManFMJ
RafterManFMJ's picture

"President Obama and Congress should get busy doing what is best for the economy and the American public instead of enriching themselves and those who feed at the public trough."

This quote signifies the author is a genuine fucking retard; I'd gladly donate to his sterilization fund.

Now I ask you, I call upon the ZeroHedges of new and old, to re-read the above quote.

I hereby posit for the first time on the internets that there is a level BEYOND full retard, and I name it thus:

Full Plaid Retard

Sun, 03/09/2014 - 15:32 | 4528161 Atomizer
Atomizer's picture

I’ll leave you two links, you decide on how they interconnect world government in United States of America.

http://investmentwatchblog.com/billionaire-george-soros-doubles-his-bet-that-the-market-is-heading-for-a-crash/

http://www.georgesoros.com/

 

Do you understand why countries are leaving the Federal Reserve petrodollar farce?

http://www.newyorkfed.org/research/current_issues/ci12-9/ci12-9.html

 

The Jew fucks need to create terrorism to keep the moneychangers in business. The Islam world sees this. This can’t get any easier in figuring out the one world system. Unfortunately, everyone will pull money out of the new JEW banking control. The banking collapse will occur before they become the next Israeli universal currency banking institute.

 

I digress.. LOL

Sun, 03/09/2014 - 15:33 | 4528164 Oquities
Oquities's picture

Austerity is when they don't let you buy legal weed wif your bridge card.

Sun, 03/09/2014 - 15:42 | 4528186 stormsailor
stormsailor's picture

the "KENYAN" view.  there fixed it for ya

Sun, 03/09/2014 - 15:45 | 4528195 realWhiteNight123129
realWhiteNight123129's picture

Well the central bank of China has found a way around.

China has a trade surplus, normally treasuries balance increase, but the CHinese gov is encouraging and DE-taxing gold. (anything that is detaxed results in a boom, same thing for stocks in Japan).

 

So China receives TSYs on the balance sheet, ok. Next some base money is created against this "monetary asset", which is the reserve of commercial banks which in turn has bank currency deposit.

Here we have the smart Chinese Gov encouraging the people of CHina to buy Gold.

1. The currency deposit is withdrawn to buy physical gold. So the currency deposit is shrunk, some Gold is imported and some Treasuries are returned back to the US and exchange for Gold.

Results:

1; CHina stops increasing its TSYs and USD holdings.

2; Chinese people are protected from currency turmoils down the road.

3; The TSY come back home to the US, forcing the Fed to buy them.

So end of USD appetite is happening right now.

 

Sun, 03/09/2014 - 15:46 | 4528198 Rising Sun
Rising Sun's picture

the bond market will TELL obama when and what to spend

 

fucking Barry - bloody asshole

Sun, 03/09/2014 - 17:09 | 4528373 Professorlocknload
Professorlocknload's picture

I used to think that, but they musta locked all the Bond Market Vigilante's up, 'er somthin'.

Sun, 03/09/2014 - 17:34 | 4528455 Alpha Monkey
Alpha Monkey's picture

FED is Master of Bondverse.

Sun, 03/09/2014 - 15:47 | 4528199 Seasmoke
Seasmoke's picture

i aint doing jack shit, to help out fucking thug cops, thug bankers and thug politicians.....

Sun, 03/09/2014 - 15:50 | 4528205 DaveA
DaveA's picture

If forced to make cuts, always cut the popular stuff first. Government is a huge organism turned inside out, wearing its blood and bone on the outside to protect its fat.

Sun, 03/09/2014 - 15:51 | 4528209 I Write Code
I Write Code's picture

Austerity is one golf ball per month.

Sun, 03/09/2014 - 15:54 | 4528216 Atomizer
Atomizer's picture

In unfriendly times. Currency wars, will hit MSM, until then, don’t tell then the truth!

Sun, 03/09/2014 - 15:57 | 4528219 Schmuck Raker
Schmuck Raker's picture

Repudiate the Government's debt.

This is the surest solution, and eventuality.

Sun, 03/09/2014 - 16:16 | 4528259 Bear
Bear's picture

WTF ... just repudiate the Government

Sun, 03/09/2014 - 16:41 | 4528312 orez65
orez65's picture

Austerity is not spending more than you bring in.

Try to explain that to Nancy Pelosi!!!

Sun, 03/09/2014 - 17:12 | 4528377 Professorlocknload
Professorlocknload's picture

But, I thought it was the Fed's mandate to print everything she and her pals spend?

Sun, 03/09/2014 - 19:00 | 4528710 Accounting101
Accounting101's picture

Who will be on the other side of the transaction?

Wed, 03/12/2014 - 01:42 | 4537481 Schmuck Raker
Schmuck Raker's picture

Well, yeah Bear. I think we're on the same page using different definittions. To me the debt IS the Gov; the Gov IS the debt.

In a different place or time that may not have been the case, but...

Sun, 03/09/2014 - 17:32 | 4528447 moneybots
moneybots's picture

There hasn't been any austerity.  The budget has not been anywhere near balanced.

 

Obama is lying again.

 

 

 

 

Sun, 03/09/2014 - 18:10 | 4528562 Accounting101
Accounting101's picture

There has been at the state level.

Mon, 03/10/2014 - 18:54 | 4532473 X_mloclaM
X_mloclaM's picture

links please. tax cuts, by State:

Sun, 03/09/2014 - 17:41 | 4528468 moneybots
moneybots's picture

"Austerity applied to whole countries, is not necessarily so harsh or ascetic. It simply means that the government has to live within its means"

 

Obama wants to live like a king.

Sun, 03/09/2014 - 18:43 | 4528659 kchrisc
kchrisc's picture

The Nazis had just about squeezed all they could from the economy from 1933 to 1939. A recession or worse was on the horizon. They too had to decide between "austerity" or a war to hide the recession/depression.

Sun, 03/09/2014 - 18:50 | 4528683 kchrisc
kchrisc's picture

Austerity?! How about government reduced by guillotines?!

Sun, 03/09/2014 - 20:25 | 4528956 Milestones
Milestones's picture

Alright, I'll be the first-- when is your Guillotines(with basket) IPO first offering???             Milestones

Sun, 03/09/2014 - 22:10 | 4529247 kchrisc
kchrisc's picture

No IPO, just DIY.

The "returns" will be astronomical. Think about the benefits when the banksters are all gone and they can no longer "print," steal, our labor and product. Imagine no more sociopaths telling everyone what and how they can work and produce. No longer having gun and badge thugs' "standard issue" kicking in doors and seizing Property, Liberty and Lives for the sociopaths above.

Trillions of savings and lives to boot.

Sun, 03/09/2014 - 18:57 | 4528698 Accounting101
Accounting101's picture

What a bunch of horseshit! The Austerian utopia is a fantastical economic theory that has never existed and never will. The reason is because its a bunch of childish bullshit. The Von Mises clowns love to pull Latvia out of their asses, of course without any context. Latvia destroyed an entire generation to achieve their "economic success". All the kids emigrate because there are no goddamn jobs or future.

I just marvel at the foolishness of those who advocate for this economic witchcraft. Many believe that if this crap is applied, somehow they will be immune from its pernicious effects. They believe only those greedy teachers, police officers, firemen and librarians with their big health care policies and fancy pensions will be harmed.

Is it any wonder why the middle class is getting decimated?

"Looking in the mirror at my enemy" Mary J Blige

Sun, 03/09/2014 - 19:52 | 4528853 Carl Popper
Carl Popper's picture

Austrian economic theory is not Austerian  

 

We are in a classic business cycle predicament as a result of inefficient and misallocated spending, not the level of spending. 

 

We have some things going for us in the USA that may help us muddle thru.  But then again maybe not.   For most countries there are not a lot of good options when each additional dollar (or unit) of debt is generating less than a dollar in return. 

 

We have to keep spending and hope for a productivity miracle or that the rest of the world will continue to subsidize us.  That is the unspoken truth of those like Obama who consider this "austerity" but I think that Hayek and others got it right that there is no easy way out of a huge credit bubble.   It either gets inflated away or repudiated, and either option is painful.  

 

 

Mon, 03/10/2014 - 18:11 | 4532310 LooseLee
LooseLee's picture

Obviously you are another pyseudo-accountant who worships at the feet of Keynes and the Fed. I'm surprised, with what math skills an 'accountant' is supposed to possess, that you have no understanding of economics. So the Austrians are 'wrong'. In what aspect? Please do tell. And do not spew any Keynsian  (sp) nonsense. There is no free lunch. Do not give a reason that ultimately points to a 'free lunch' (e.g. fiat currency, fractional reserve banking, et. al.) I'm waiting...

Mon, 03/10/2014 - 18:56 | 4532482 X_mloclaM
X_mloclaM's picture

Yep: Latvia destroyed an entire generation to achieve their "economic success".

Joined Bruzxelle D.C. on jan 1

Sun, 03/09/2014 - 19:15 | 4528758 LooseLee
LooseLee's picture

Fortunately, REAL 'Austerity' is coming BOTH to the USSA and the Status Quo. Can't wait to see the results!

Sun, 03/09/2014 - 19:38 | 4528818 Carl Popper
Carl Popper's picture

You and others like you really shouldn't be excited to see the party end.   Everyone's standard of living is fucked. Try living on half or less of your current income with no health insurance subsidy. 

 

The deflation monster will eat you too, if he ever goes on a rampage. 

Mon, 03/10/2014 - 18:16 | 4532327 LooseLee
LooseLee's picture

I live on very little income because I have learned that there is no 'free lunch'. I do not depend on others for my sustenance. You are one who needs to fear deflation. Matter of fact, my lot will be greatly improved in a deflationary environment... And by the way, I do not consider this a 'party'. I consider it a rejection of Truth and spitting in the eye of the 'Creator'....

Sun, 03/09/2014 - 19:34 | 4528807 Carl Popper
Carl Popper's picture

Even a decrease in the rate of credit expansion will cause a reduction of growth in the economy or cause deflationary pressure. 

 

Deflation is not a bad thing for an economy that isn't over levered.  An economy not excessively in debt  can handle it without significant reduction in growth.   Our economy can't handle reductions in the rate of credit expansion without it feeling like austerity to some people. 

 

However the deflation monster is so huge that we can probably get away with even more QE and even higher government spending as long as our debt remains the world currency.  

 

 

 

 

Sun, 03/09/2014 - 20:15 | 4528924 g'kar
g'kar's picture

Obama's New World Odor Dicktionary:

Austerity: A racist term used by anti-FSA bigots who think people should make their own way through life.

Sun, 03/09/2014 - 21:29 | 4529140 Kelley
Kelley's picture

Austerity means to Obama using only two jets for vacation instead of three.

Mon, 03/10/2014 - 00:58 | 4529562 anuj0990
anuj0990's picture

This is very useful information shared here. I am really thankful for this.

http://www.99th.co.in

Mon, 03/10/2014 - 02:02 | 4529608 rockface
rockface's picture

Shouldn't Obama start austerity before he ends it?  It's very confusing but I have hope it will change.

Mon, 03/10/2014 - 04:40 | 4529693 Global Observer
Global Observer's picture

There is no better way to discredit an idiot than to let him/her have it their way. All atempts to stop Obama from implementing his plans should be held in check and he allowed to have his way, with the opponents openly declaring that they are tired of attempting to drive sense into his head and are allowing him to have his way knowing full well that it will lead to a disaster and when the disaster strikes in the form of hyperinflation they will be vindicated.

Mon, 03/10/2014 - 07:59 | 4529808 kenezen
kenezen's picture

One of the best articles I've read! 

Reducing Federal Government's reach into the economy reversing the trend back to "States" competition to create and bring back Heavy industrial MFG. that made our history of Freedom and Capitalism from 1850's to late 1960's the very best in the world. Get rid of most Agencies that regulate competitive business!! Allow business for the first time in over 60 years to be openly and capitalistically competitive with the world! hedgemastermb.blogspot.com  Read!

Mon, 03/10/2014 - 19:05 | 4532513 X_mloclaM
X_mloclaM's picture

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