Paul Krugman

[2.5pi]

What' a total tosser ..must stop watching Newsnight

[12gauge]

"what we need is a housing bubble to replace the tech bubble"

Krugman endorsed that back in 2002.

[Sway]

The guy is a fking idiot, my 6yo has a better grasp of economics.

He also contradicted himself - first it was that Canada and Sweden had strengthened through slashing an enormous state, then it was that the bigger the state the better...

As for the deference accorded to him for winning a Nobel, well let's just say my opinion of the impartiality of the Nobel committees has been severely impacted in recent years...

[fido]

He was a big fan of Gordon Brown, which puts in the same category as Ed Balls. I rest my case. We both went to the same university but me thinks he spent too much time in academia and lost track of reality.

[crankedup]

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K. Agree the State cannot be enlarged either. Pension funds cannot be used for long term infrastructure investment.
Any goldmines around that have not been exploited.

[Caulkhead]

crankedup said:

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K.

Why isn't it working for the UK? We can borrow at historically low rates and have a triple A credit rating despite our huge deficit because the markets trust our austerity plan. Growth is certainly too slow, but that's highly preferential over 5% instead of 2% borrowing and growth will be hard to find irrespective until the uncertainties of the eurozone collapse go away.

[Sway]

Caulkhead said:

crankedup said:

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K.

Why isn't it working for the UK? We can borrow at historically low rates and have a triple A credit rating despite our huge deficit because the markets trust our austerity plan. Growth is certainly too slow, but that's highly preferential over 5% instead of 2% borrowing and growth will be hard to find irrespective until the uncertainties of the eurozone collapse go away.

Exactly.

Let Europe burn in the fires they've created, then take full advantage.

Then growth can occur.

Never known someone to move to a bigger house whilst trying to pay down the mortgage, but know plenty who've been able to after said pay down...

[Fantic SuperT]

I didn't understand the protest about slurring the good people of Greece for a problem that wasn't their fault. Using false accounting to obtain Euro entry by deception and thereby hundreds of billions of euros that will never be repaid is surely the greatest fraud in history. If there was any justice Interpol would have arrest warrants issued for everyone involved. The Great Train robbers and Bernie Madoff were nothing compared to the Greek euro entry scam.

[turbobloke]

Fantic SuperT said:

I didn't understand the protest about slurring the good people of Greece for a problem that wasn't their fault.

Fine the good people of Greece are blameless, what about the not so good people?

[IroningMan]

The people of Greece knew darned well they were stealing from the Germans all along - they just believed it was their right to do so.

[P-Jay]

he was just on Radio 2 whilst I was out at lunch. He made some interesting points.

I'd guess his call to build, not one, but two statues in honour of Gordon Brown won’t win him many fans on PH...

So here we are, 2 years onto austerity and (hopefully) just getting out of a double dip recession to look forward to 2, 3, 5, even 10 years (if we follow Japan's example) of little/slow growth if we carry on our current path, or so Paul Krugman and Mervin King think.

As voters do we follow the Condems (probably no mention of Dems after the next election) plan to pay down our national debt until it’s at an as-yet unplanned level and accept a slow painful recovery, but if all goes to plan at the end of it, we'll have a strong economy and a low national debt.

Or follow the Labour / Krugman approved plan of stimulating the economy by borrowing more and spending, thus reducing our social security bills in the short-run to off-set some of the spending. Accepting this will increase our national debt and even causing a loss of our AAA+ rating meaning the debt will cost more, then once the our economy is at an as-yet unplanned level and the government has more income - paying off our debt.

To my mind they're both 10 year plans, the first one will probably mean 5 years of pain, followed by 5 years of things getting slowly better. The second means less pain now, 5 years of rapid growth based on borrowed debt and more government, more job creation, for the sake of creation and hoping you can take us off the debt life support machine in 5 years when the economy is in boom again and the private sector can keep us going whilst we pay off the huge debt.

[JagLover]

crankedup said:

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K. Agree the State cannot be enlarged either. Pension funds cannot be used for long term infrastructure investment.
Any goldmines around that have not been exploited.

Firstly there is no alternative to austerity and it is 'working' to the extent that credibility has maintained even if actual progress in reducing the deficit is small.

Secondly to generate growth we do not need more non-jobs or welfare spending, but supply side reform.

The only additional state spending I would support at this time is infrastructure investment.

Edited by JagLover on Thursday 31st May 13:19

[P-Jay]

turbobloke said:

Fantic SuperT said:

I didn't understand the protest about slurring the good people of Greece for a problem that wasn't their fault.

Fine the good people of Greece are blameless, what about the not so good people?

The people of Greece aren't blameless, tax evasion in Greece is rampant and has been forever and a day, everything's cash, "no receipt please, save the tax".

[Fantic SuperT]

P-Jay said:

turbobloke said:

Fantic SuperT said:

I didn't understand the protest about slurring the good people of Greece for a problem that wasn't their fault.

Fine the good people of Greece are blameless, what about the not so good people?

The people of Greece aren't blameless, tax evasion in Greece is rampant and has been forever and a day, everything's cash, "no receipt please, save the tax".

Exactly. They knew who they were electing to Govern them. There's still no land registry to facilitate a proper housing market or privatisation of badly state run monopolies. There's masses of unnecessary bureaucracy to prevent businesses from starting or to extract bribes from those that still exist. It would be cheaper to pay taxis for every passenger on the Greek railway network than keep the trains running without collecting fares and so on...

[turbobloke]

Fantic SuperT said:

P-Jay said:

turbobloke said:

Fantic SuperT said:

I didn't understand the protest about slurring the good people of Greece for a problem that wasn't their fault.

Fine the good people of Greece are blameless, what about the not so good people?

The people of Greece aren't blameless, tax evasion in Greece is rampant and has been forever and a day, everything's cash, "no receipt please, save the tax".

Exactly. They knew who they were electing to Govern them. There's still no land registry to facilitate a proper housing market or privatisation of badly state run monopolies. There's masses of unnecessary bureaucracy to prevent businesses from starting or to extract bribes from those that still exist. It would be cheaper to pay taxis for every passenger on the Greek railway network than keep the trains running without collecting fares and so on...

No doubt Greek politicians have the same porcine trough DNA as ours, but what about a significant cross-section of the population running a shadow economy equivalent to one-third of GDP over thirty years while maintaining a position on tax evasion equivalent to 15% GDP when the deficit is about 15% GDP?

[crankedup]

Caulkhead said:

crankedup said:

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K.

Why isn't it working for the UK? We can borrow at historically low rates and have a triple A credit rating despite our huge deficit because the markets trust our austerity plan. Growth is certainly too slow, but that's highly preferential over 5% instead of 2% borrowing and growth will be hard to find irrespective until the uncertainties of the eurozone collapse go away.

Agreed the triple A rating and low interest rates, but the current reduction is just a drop in the ocean of debt and the rate of reduction implies at least another decade before we are seeing the light. I cannot see how this can be sustained with increasing unemployment, SME having almost zero access to business loans and the increase in benefits which is bound to happen when we invite half of the PIGS population over. I cannot see an end to the Euro crisis before the end of the decade and the fall out from PIGS (lesser extent Ireland) will be a major downer for any growth hopes for us for years to come.
Not sure how much more the BOE will provide QE.
Would I be far off by suggesting that Labour will be in power next time around and they will introduce the major infrastructure building in the hope of stimulating growth. Seems to me that half of the 'experts' favour current Government action whilst the other half favour a stimulus program for growth, I refer to Economics commentators. Perhaps the answer is somewhere inbetween?

[Fittster]

turbobloke said:

No doubt Greek politicians have the same porcine trough DNA as ours, but what about a significant cross-section of the population running a shadow economy equivalent to one-third of GDP over thirty years while maintaining a position on tax evasion equivalent to 15% GDP when the deficit is about 15% GDP?

So if increasing the tax income of the government to reduce the defict is a good idea, we should raise taxes in the UK?

[crankedup]

JagLover said:

crankedup said:

So exactly what is the answer, clearly the austerity program is not working for the PIGS or the U.K. Agree the State cannot be enlarged either. Pension funds cannot be used for long term infrastructure investment.
Any goldmines around that have not been exploited.

Firstly there is no alternative to austerity and it is 'working' to the extent that credibility has maintained even if actual progress in reducing the deficit is small.

Secondly to generate growth we do not need more non-jobs or welfare spending, but supply side reform.

The only additional state spending I would support at this time is infrastructure investment.

Edited by JagLover on Thursday 31st May 13:19

Agreed, but where do we find the money for the infrastructure program.

[Marf]

crankedup said:

So exactly what is the answer

Stimulate demand - Slash income taxes, increase personal allowance to £30k, increase VAT to 30%.

Would be a good start.

[Sway]

Fittster said:

turbobloke said:

No doubt Greek politicians have the same porcine trough DNA as ours, but what about a significant cross-section of the population running a shadow economy equivalent to one-third of GDP over thirty years while maintaining a position on tax evasion equivalent to 15% GDP when the deficit is about 15% GDP?

So if increasing the tax income of the government to reduce the defict is a good idea, we should raise taxes in the UK?

Don't wish to answer for TB, but his response was to the Greek representative on Newsnight protesting at 'innocent' Greeks being tarnished. I read TB's post as pointing out they aren't exactly innocent, and deserve to be tarnished...

Crankedup - there's plenty of credit available to SMEs, the change is that they actually have to come up with a credible business case, which many aren't used to. Those that are seem to be intelligent enough to recognise that its not the scale of the debt that's the issue, but the ability to service it. As such, rather than asking for more at the moment, they're paying off what they currently have. THEN they'll look for more to enable growth through investment. Also, there will be no influx of PIGS to the UK. Osborne has already stated they are planning emergency measures to prevent this in the (increasingly likely) event of EURO collapse...