Did U.S. just implement more severe austerity measures than Great Britain? A quick response

by: Peter Jukes

Fri Jan 04, 2013 at 17:54:49 PM EST



Sorry this diary is so brief. But sometimes the truth is simple.

A rec listed diary on DKos asks Did U.S. just implement more severe austerity measures than Great Britain, Spain?. There's a simple answer to this...

No.

If you want a taste of what real neoliberal austerity feels like, come to Britain. Today the Guardian reported

A shock fall in activity in Britain's services sector at the end of last year has put the economy on the road to a triple-dip recession, as economists predict the UK will be stripped of its triple-A credit rating.

The services sector - which accounts for three-quarters of Britain's economic output - shrank for the first time in two years in December, suggesting the UK economy contracted in the fourth quarter. If output drops again over the next three months, the UK will fall into its third recession in five years - an unprecedented triple dip.

Peter Jukes :: Did U.S. just implement more severe austerity measures than Great Britain? A quick response
The Labour Government responded to the financial crisis of 2008 with a stimulus package, much like that put together by the incoming Obama administration in early 2009. Growth resumed. But then the Conservative Lib Dem Coalition was formed in the wake of the inconclusive 2010 election, and put forward a radical package of cuts which enforced a massive shrinkage of public sector investment, benefits, and procurement just at the worst moment, in Keynesian terms.

Back in the UK, we're relearning the hard way the lessons of the 1930s - that you don't deleverage public sector spending when private deleveraging is so high. We've relearned the paradox of thrift on a massive scale, as the government, in an attempt to cut public spending, has miscalculated the multiplier effect, which in turn has forced them to borrow more.

Let's call it failure
John Lanchester looks at the nation's finances

Saying 'I told you so' is supposed to be near unbeatable fun, so it's disappointing to report that, in the case of the government's handling of the British economy, speaking for myself, no fun is being had. As George Osborne's autumn statement made clear, the scale and speed and completeness with which things are going wrong are numbing. The Tories went into the 2010 election with a manifesto commitment to reduce the structural deficit - the amount by which the government's spending in any given year exceeds its income, excluding temporary effects from the downturn. The first point in their economic policy read as follows: 'We will safeguard Britain's credit rating with a credible plan to eliminate a large part of the structural deficit over a Parliament.' How? It's on the next page: 'We will cut government spending to bring the deficit down and restore stability.'

That's what they set out to do. In June 2010, in his first budget, Osborne said the structural deficit was 4.8 per cent, and that with three years of reduced spending, the figure would be down to 1.9 per cent. So how's that going? Well, by the end of those three years, after £59 billion of tax rises and spending cuts, the figure is set to be....  4.9 per cent - higher than it was when the coalition came to power. Osborne's single biggest economic ambition was to get the deficit down, but he hasn't managed it, and has had to abandon his noisily announced target to get rid of most of the deficit in a single parliament. Gather round, children, and take a good look. This is the thing we call failure.

Just FYI

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hahahahahahahaha (2.00 / 14)
I didn't even have to look to see who's diary it was.

Did Obama get just about the best deal possible under the circumstances or ARE WE ALL ABOUT TO FRIGGIN' DIEZ FROM CONSUMMIN' CATFOOD POISONED WIFF UTTER BEETRAYUL?!?!!!?1!!?

/nakedcapzerohedgebarf

Earth is the best vacation place for advanced clowns. --Gary Busey
 


p.s. (2.00 / 11)
makes me miss bonddad.

Earth is the best vacation place for advanced clowns. --Gary Busey
 


[ Parent ]
Heard that (2.00 / 9)
I always found bond dad a bit arrogant, and his sigline quoting spitzer with a "come at me bro" vibe turned out funny given his departure, but he was logically consistent on the economy. The way meteor blades went after him when economic indicators turned around should have been a clear beacon to the reality based sub community of GOS. Now kos has front page writers wishing for a default. I need to lie down for a bit.

[ Parent ]
yeah (2.00 / 9)
I always found bond dad a bit arrogant

i can see that, but he cut through the bs bs better than most, and i couldn't help but find it delicious.  it's okay to admire apollo's 'tude after he's friends with rocky.  heh.

Earth is the best vacation place for advanced clowns. --Gary Busey
 


[ Parent ]
Hope you got that nap, bubba. (2.00 / 7)
I need to lie down for a bit.


Words have meaning. Our words will reflect what is in our souls.


[ Parent ]
They had those in 2011 too (2.00 / 8)
I simply don't believe the Republicans would give in on raising the debt ceiling. They got a public uneducated and unwilling to be educated on the complicated issue on their side.

The difference now is they really don't have much to win if they do. They can't beat Obama. But if they could send the country into a spiraling ball of chaos and blame "spending and big government," they win.

And it's hard to counter that since "spending" is why we're here. Of course the problem is it isn't Obama's spending, but good luck trying to explain that to your everyday "OMG KIM IZ TOTALLY PREGGERS!" American voter.  


[ Parent ]
True, and I've always (2.00 / 8)
enjoyed bobswern's diaries.  Both men have a lot to contribute.  

In a country as big as the US, economic conditions are not the same uniformly across the country.  Maryland, where I live, is a case in point.  Head into the DC/Baltimore corridor and you would be hard pressed to believe there was ever a recession.  Head out to the mountain panhandle west of Hagerstown or across the Chesapeake to the Eastern Shore, and it's like a different state.  The Shore is still in the doldrums economically, even allowing for the usual seasonal differences.



"Fighting Fascism is Always Cool." -- Amsterdam Weekly, vol. 3, no. 18
(-8.50, -7.23)  


[ Parent ]
Swern is hit or miss for me (2.00 / 7)
Theres substance there in a lot of cases, but also a lot of spin and molehill-into-mountaining. Bond dad was mostly raw data with small amounts of straightforward interpretation. With Swern I can usually get the point straight from naked capitalism.

I agree about the recession... Los Angeles has plenty of areas that seem unaffected.  Other areas...woof. Inequity before 2008 seems to have grown.


[ Parent ]
Carlsbad, NM has something like 4% unemployment (2.00 / 2)
Mining town. Of course we also have a town full of house owners who don't own their mineral rights. So if whoever owns mine decides to frack under my house, I am SOL. This is not, I think, a very good way to run a culture.

[ Parent ]
I get what you're saying. (2.00 / 13)
You make a really good point.  We haven't had real austerity here yet.  That does not mean we do not need to be vigilant here in the US -- any trial balloon that goes up suggesting we do something stoopit to our safety net will need an immediate "HELL NO!!!" response.

That said, we're not completely safe.  The 113th Congress may have one safe, reasonably sane chamber, and then there's the other one.  I think we can all expect that the House Republicans will do their dead-level best to undermine agencies that provide a floor.  Witness what happened to the Sandy relief bill.  

There is a diary on GOS that outlined what is on the table in sequestration and what is not.  "The Left's Sequester Leverage" is a thoughtful piece outlining what is believed to be safe from the austerity posse.  That said, I think it behooves Americans to keep their eyes on this fight, because there are too many in the Republican caucus who would like nothing better than to weasel out of any prior agreements.

OTOH, for a lot of us, we don't need official austerity because we've been driven to impose our own mini-austerities by the weak economy.  I live in Maryland, a state that on the whole is doing very well.  But I do not live in the DC-Baltimore corridor.  My part of the state is not recovering yet.  We're usually at least a year behind the rest of the state.  Wages haven't kept pace with inflation for several years, yet the cost of everything is going up.  Every month is a juggling act that becomes ever more painful and frightening.

And yet, we are not Greece, and I thank Dog for that not-so-small mercy.


"Fighting Fascism is Always Cool." -- Amsterdam Weekly, vol. 3, no. 18
(-8.50, -7.23)  


I lay most of the blame at the door of the corporations. (2.00 / 3)
and the elected officials who enable them.  American companies who show their patriotism by offshoring and outsourcing.  CEOs, managers, and shareholders who see workers as another expense to be managed to maintain their own bottom lines.  Corporate tax loopholes won't be closed any time soon because CEOs will proclaim that they'll need to increase costs and/or layoff workers in order to continue to be profitable.   /snort

I got into a Facebook tiff a couple of days ago with a friend of a friend.  Gerald is a small business owner with the stereotypical corporate CEO mentality.  He sent my blood pressure rising when he said that he'd have to lay off some employees because of the fiscal "cliff" deal but that he'd be giving himself a raise as well in order to maintain his current income.  He can justify both because it is survival of the fitest and he worked hard to own his own company and one cannot be successfull unless one owns a business.  Never mind the workers that have helped make his business what it is.  Never mind that by his own reckoning bigger companies deserve to be better because their owners worked harder to get where they are.

Life isn't one big season of Survivor.  I don't want to arm wrestle someone for a job or a raise.  I want to be fairly compensated for the job that I do.  Maybe get a raise every year or so (at least as often as managers get bonuses).  I'd like to take a vacation once in awhile and I'd like to know that I'm not living paycheck to paycheck until I die.  That's most people and a few business types.  I gave up trying to have a conversation with Gerald; cannot deal with someone who sees me as being on par with the office supplies.

(Whe the hell do I keep seeing ads to date Chinese women on the sidebar?!)

"When Fascism comes to America, it will come wrapped in teh stupid and waving a gun" ~ Esteev on Wonkette


[ Parent ]
I often try to lure the right wingers (2.00 / 2)
in a conversation by stating "Aren't we better than this?"

Like "Can't we, the most powerful country in the world, provide healthcare to its citizens like every other civilized country."

"Can't we, the most powerful country in the well, pay its citizens a decent wage like every other civilized country?"

"Can't we, the most powerful country in the world, find a way to live in peace and not need armed guards at our children's schools, like every other civilized country"

To my surprise, the answer I get from them is a blunt "Nope." It really is amazing, they actually don't BELIEVE we can do any better. Further inquiries lead to them blaming video games (that they themselves play), movies (that they themselves watch), abortion and illegal immigrants. One friend of mine blamed The Hunger Games (which he took his girlfriend to go see).

It often is what leads to my cynical hopelessness.


[ Parent ]
Because, to them, it is survival of the fittest and every man for himself, (2.00 / 2)
and pull yourself up by the bootstraps and every other worn out cliche about the rugged individualist.  Just work harder, longer, better and all will be grand.  If not it is your fault.

Arguing with that is like beating your head against a wall.

"When Fascism comes to America, it will come wrapped in teh stupid and waving a gun" ~ Esteev on Wonkette


[ Parent ]
There's just so many of them (2.00 / 2)
it's hard not to feel completely outnumbered.  

[ Parent ]
With all due love and respect, (0.00 / 0)

I would suggest that delivery is key.

I have the same types of conversations quite often with people on the further right, and similarish ones with people on the further left. It takes a long time - a lot of thin layers of words and thoughts laid down in succession - to support my supposition that the world not only can but will (and is) work out amazingly well.

The cynicism you note from rightwingers is not different to me than the cynicism I note from you. I know many many lefters who share your cynicism, and I have as many or more conversations with your kin as I do with your political mirror images about just the kinds of things you bring up.

Can't we be the humans we are and solve the world's problems? Can't we have wealth and fairness? Can't we find ways to feed an almost unlimited population, clean whatever messes we make, reduce corruption beyond our hopes?

Where I just throw those questions out there the answers are predictable.

"Nope."

Where I spend the time - often literally an hour or three - laying out premises and precedent in an appropriately engaging manner (avoiding known tiger traps, employing tone and tenor, building from point to point) my results are quite the opposite to what you experience.

The two Brits in Sana'a recently - one older and jaded, the younger educated and cynical - are perfect examples. It was the older one, full of a life of experience with the worst mankind can offer, who was most effusive on our parting. I will never forget the expression on his face and the light in his eyes as we parted and I hope we have a chance to fulfill his wish to talk again even longer and deeper.

But we talked for hours and hours, all evening and early into the morning. It was not until long after dark that my arguments began to turn - ever so slightly, like a big ship under steam - his side of the conversation from its cynical course.

It takes time, and it takes depth. The folks you talk to are not as hopeless as they seem to you. Neither are you, to me. :~)

"Conway, whom experience had taught that rudeness was by no means a guarantee of good faith, was even less inclined to regard a well-turned phrase as a proof of insincerity."  James Hilton, Lost Horizon  

John Askren - "Never get into a pissing match with a skunk."


[ Parent ]
Typically I get a (2.00 / 1)
"We're just not going to agree, so drop it" response.

Though inside, I think its that they agree with me, but are too ashamed to admit it, which frankly is worse.


[ Parent ]
Food prices (2.00 / 2)
I've noticed an alarming leap in food prices since the year turned. This has been going on for some time but just this last week I saw some big increases in pretty basic stuff. This has all been predicted, and the drought in the midwest this year is likely only beginning to have its effects felt.

[ Parent ]
So why do european politicians pursue austerity? (2.00 / 9)
I understand it in the us, the home of Galts Gulch. I don't understand it in Europe, where I imagine a general mistrust of markets. For fsm sake in Germany unions typically have board of directors representation in corporate governance. How does austerity happen in theUK? Y'all cant be crazy as us?

Difference between us and Brit: (2.00 / 10)
We elected Obama and Brit elected David Cameron. Brit loves his monarchy as does our media channels.  Juke is  popular SUV here. Brit needs a chauffer to  drive around.

Brit says potato... (2.00 / 10)
... I say papa.

Wait... what?!?

Just because they are posting on a progressive site doesn't make them progressives. - John Allen


[ Parent ]
Who's your daddy now, hijo? (2.00 / 9)


The p***artist formerly known as 'Brit'

[ Parent ]
So is this some secret code (2.00 / 8)
To keep us n00bs at bay? Time for a drink...

[ Parent ]
Nah. Just some naff joshing on the papa theme (2.00 / 10)
Apart from my own wonderful son, Alexander, I'd be proud to be spiffy's dad.  

The p***artist formerly known as 'Brit'

[ Parent ]
Damn. (2.00 / 9)
That comment touched my heart.

It would be an honor. :~)

Thanks dude.



Just because they are posting on a progressive site doesn't make them progressives. - John Allen


[ Parent ]
Don't you two mess with me like that (2.00 / 6)
ever again...

Do I get to play Great-Auntie Madge?

Really, I'd do such an excellent job of it. The lot of ya.  


[ Parent ]
On a National level I would agree that the US didn't go austerity, but not (2.00 / 11)
for lack of trying by the House of idiots.  What is distressing is watching the various states that are trying to implement their own versions. Texas cutting Planned Parenthood funds and the court agreeing to it, Wisconsin with Union busting bills, Michigan with Emergency Managers.

I worry that piece by piece laws will dismantle local safety nets and people will not fight back hard enough. Trying to figure out how to get an active coalition together to fight the individual austerity before it goes national. Just some early morning coffee musings.


Yes, my point in this diary (2.00 / 11)
And its Kos counterpart, was merely to explain that the meme 'Obama is a bad as a republican' omits the evidence of history: my history, in particular, with a right wing government for the last three years

The p***artist formerly known as 'Brit'

[ Parent ]
It's a damn good diary in both places. (2.00 / 9)
The whole point of the blogosphere, to me, is that we get to have these amazing conversations with all sorts of different opinions and perspectives sloshing around together.  If I wanted an echo chamber, I'd just watch Faux Noise.


"Fighting Fascism is Always Cool." -- Amsterdam Weekly, vol. 3, no. 18
(-8.50, -7.23)  


[ Parent ]
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