Why does anyone believe printing more and more money backed by nothing works?

 

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I have nothing to prove in this thread.

It's like asking someone to prove that gravity exists. I'm simply pointing out that anyone who believes in austerity as a solution to deficits....is ignorant of reality.

Continue to be ignorant if you want, or investigate why you believe in the stupidity if you want. Your choice. Not my problem. All the austerity talk will eventually die down anyway. It always does, always will....because it can't stand up to the facts.

I think that's what he is asking. What are the facts.

 

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Austerity by itself does nothing. Austerity has to be combined with increases in production. This is possible if government spending is crowding out investment or hurting investment in some way. For example a country can have so much debt that it has to import capital. This in turn makes their currency stronger which undermines their production.


Debt spending and trade go hand in hand so austerity is a very important part of any plan to address production in a country that has more imports than exports.

 

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Strangely enough even the experts who devoted their lifetime figuring things like this out seem to be split in the advise they give. What do we do?

 

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Reasonable spending cuts aren't austerity.

Austerity is a policy of lowering spending AND cutting benefits and public services.

A long time ago mercantilism was vilified in economics to the point that it was almost written off as worthy of discussion. Meanwhile in reality it is constantly being used to varying degrees. I just think it is very hard for an American economist to tell a President they have to be more mercantilist and that the only way to counter the mercantilist practices of nations like Germany and China is to be mercantilist as well.


The need to have these conversations increased when Europe and Asia rebounded and the US went off the gold standard.

 

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So your definition of austerity is that they are unreasonable cuts by defintiion?





Way to take one from paul's playbook.

 

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No my definition is what I actually stated above.





But you are right I shouldn't have put the word reasonable in the first line. Stupid of me as it is meaningless and simply opened the door to posts like yours. Deserved it. My bad.

My bad for assuming you were logically consistant from one sentence to the next. I forgot who I was talking to.

 

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