Look at this frigging chart, folks. What in the hell is Mr. Krugman talking about? The spending in ALL of these European countries is still ABOVE what it was prior to the recession and there hasn't been any reduction at in in England and France. Maybe Mr. Krugman needs to tell the truth here and admit that the major chunk of this so-called European austerity program is tax hikes, and that maybe it's that that's bringing the recovery to a halt. Not that I'll be holding my breath for that to happen, obviously.
Yes... such tax hikes are usually a way to push a country over the cliff, not save it from anything.
ReplyDelete"U.S. News and World Report" did an excellent article on this, dmarks. http://www.usnews.com/opinion/articles/2012/06/01/the-myth-of-european-austerity
ReplyDeleteI don't know about Europe, but here in the US not raising taxes is holding back the recovery.
ReplyDeleteI suspect that european taxes were and are much hire than ours.
ReplyDeleteI agree that we need to put revenues on the table as an overall debt reduction package but to raise them dramatically like Wilson did, like Hoover did, like FDR did, and like you apparently want to, have been and would be disastrous.
ReplyDeleteDisasterous? Is that code for "it would lead to way too much prosperity"?
ReplyDelete"The law of causality is the law of identity applied to action. All actions are caused by entities. The nature of an action is caused and determined by the nature of the entities that act; a thing cannot act in contradiction to its nature . . . . The law of identity does not permit you to have your cake and eat it, too. The law of causality does not permit you to eat your cake before you have it."
ReplyDeleteKeynesian and Krugmanians fail to understand this.
What this chart shows is how bad an idea austerity really is. I was hoping that we would learn this lesson by observing how disasterous austerity has been in Europe... but clearly the spin is that too LITTLE cutting has been done!! Unbelieveable.
ReplyDeleteI'm truly scared... because if Romney somehow manages to "win" the presidential election we will slip into a depression for sure.
There hasn't been ANY CUTTING in England and France and the cutting in Italy has already been reversed, for Christ. Austerity (other than hiking people's taxes, that is) hasn't even been tried and Mr. Krugman is a bald-faced liar if he insists that it has.
ReplyDeleteUnemployment peaked at 9% in 1930 and was actually coming down - all the way to under 7%. Then Hoover jacked up taxes 152% and within a year and a half the unemployment rate more than tripled. Yeah, great prosperity.
ReplyDelete". but clearly the spin is that too LITTLE cutting has been done!! Unbelieveable...."
ReplyDeleteIt's no spin. The countries that have a huge debt problem have it because of the massive high waste spending.
Will: Then Hoover jacked up taxes 152% and within a year and a half the unemployment rate more than tripled.
ReplyDeleteIt was too little too late.
Will: Then Hoover jacked up taxes 152% and within a year and a half the unemployment rate more than tripled.
ReplyDeleteYes, it was indeed too little too late. He should have jacked up taxes a lot more, and earlier! Then we'd have had 10 times as much unemployment within less than a year.
It was Harding's and Coolidge's tax cuts that fueled the roaring twenties which lead to a housing bubble and stock market crash that caused the depression, NOT any tax increases.
ReplyDeleteThe evidence does not support your theory, wd. Yes, unemployment went up after the stock market crash. But it peaked at 9% and started coming down. It was only when Mr. Hoover panicked and started using his Keynesian and progressive beneficent hand (deficit spending, massive tax hikes, trade restrictions, etc.) that the unemployment rate started heading back upward. And this whole "too little, too late" line is uproarious. Hoover ran up the biggest peace time deficits in American history and even FDR criticized him vigorously for them.
ReplyDeleteSo, even though economists have different theories as to the cause of the Great Depression, non-economist Will Hart knows for a fact that Hoover caused the depression when he "panicked" and went Keynesian... and it's just a coincidence that this theory fits nicely with Will's strong belief that the workers should bend over and politely ask the plutocrats if they would please violate them.
ReplyDeleteThere were probably a lot of factors, wd, the FED's overly tight monetary policy probably being one of them. And they're ALL theories.
ReplyDeleteTax increases only damage the economy.
ReplyDeleteIf tax increases only hurt the economy, then why does the economy do better when the tax rates are higher? Don't believe me? Read this
ReplyDeleteNice blog post with fudged numbers, i.e. GDP altered by dividing it into other numbers and then calling it 'real' when it is really cooked. It would be interesting to look at this without alteration: really real GDP. As for the general idea, is it ever a good idea to hike tax rates during a recession?
ReplyDeleteCome on, dmarks. You are complaining about GDP being adjusted for inflation? I've shown you my numbers that say the economy grows faster with a tax cut. Show me your numbers that say it doesn't.
ReplyDeleteYou cant go simply by rates, Jerry. Yes, Reagan dropped the top rates from 50% to 28% but that was a part of the bipartisan and revenue-neutral Tax Reform Act of 1986 that also got rid a of a lot of loopholes that the wealthy has disproportionately been taking advantage of. A top tax rate of 40% (the rate that I have been arguing for) today would probably be equivalent to about a 60-70% to rate in pre-1986 dollars.
ReplyDeleteJerry said: "I've shown you my numbers that say the economy grows faster with a tax cut."
ReplyDeleteI won't argue.
The economy grows faster when taxes are higher. Clearly that's a typo.
ReplyDeleteYeah, it really took off when Hoover raised 'em 152%.
ReplyDeleteThe economy of course grows faster when taxes are reduced. As all these taxes end up doing is discourage economic opportunity, force companies to fire people, discourage invement, and encourage economic growth and activities in countries outside the of the country with the unnecessary tax hikes.
ReplyDelete"The economy grows faster when taxes are higher. Clearly that's a typo."
ReplyDeleteI saw the Michigan Miracle of the regime of Jennifer Granholm. She clobbered the middle class and business with tax hikes. Her policies end up shedding massive numbers of jobs, and resulted in the only state with a population loss during that decade.
One of my colleagues in accounting told me of companies he had as clients who fled to Florida because the business taxes were 1/20th.
The wages of the tax policies of progressives. Force companies to flee.