Europe to USA : Give more money to IMF so we can bailout Greece, page 2
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reply posted on 14-2-2012 @ 01:01 PM by Rockpuck
reply to post by Aeons
Germans don't really agree with Keynesian Economics (Merkle sure does...)
The problem with Austerity is that it actually violates the key principle of Keynesian Economics, which is what the douche Soros was talking about.
In Keynesian Economics during hard times, when the economy has contracted, at all costs, the Government MUST increase spending in order to prop the economy up through infusions of capital or direct spending into the economy. If at any time the Government stagnates, or retracts spending, the economy will be forced to make the difference... if it cannot .. you see a phenomenon called a "Deflationary Spiral"
So Greeks cannot pay their bills.. so they cut government spending, this has sent their economy into a tailspin of near collapse (the government is spending just enough to keep it afloat, mostly by proxy through state run banks) This is turn causes severe damage to the economy.. which in turn lowers revenue and shrinks GDP, which in turn causes Debt to GDP gaps to widen, which in turn causes Greece to need more debt which in turn requires more austerity which in turn hurts revenue, which in turn increases the gap of GDP to Debt...... An inevitable Deflationary Spiral. Only it's happening slowly because Greece is pulling financial resources from outside the country. As soon as Greece doesn't get a cash infusion from the outside..... it collapses. Almost instantly.
The same thing is happening to every nation performing Austerity of any kind.. hence Europes economic contractions. The USA is likely to see a contraction soon as well without further stimulus as the economy has not fully corrected its self.
Germans don't really agree with Keynesian Economics (Merkle sure does...)
The problem with Austerity is that it actually violates the key principle of Keynesian Economics, which is what the douche Soros was talking about.
In Keynesian Economics during hard times, when the economy has contracted, at all costs, the Government MUST increase spending in order to prop the economy up through infusions of capital or direct spending into the economy. If at any time the Government stagnates, or retracts spending, the economy will be forced to make the difference... if it cannot .. you see a phenomenon called a "Deflationary Spiral"
So Greeks cannot pay their bills.. so they cut government spending, this has sent their economy into a tailspin of near collapse (the government is spending just enough to keep it afloat, mostly by proxy through state run banks) This is turn causes severe damage to the economy.. which in turn lowers revenue and shrinks GDP, which in turn causes Debt to GDP gaps to widen, which in turn causes Greece to need more debt which in turn requires more austerity which in turn hurts revenue, which in turn increases the gap of GDP to Debt...... An inevitable Deflationary Spiral. Only it's happening slowly because Greece is pulling financial resources from outside the country. As soon as Greece doesn't get a cash infusion from the outside..... it collapses. Almost instantly.
The same thing is happening to every nation performing Austerity of any kind.. hence Europes economic contractions. The USA is likely to see a contraction soon as well without further stimulus as the economy has not fully corrected its self.
reply posted on 14-2-2012 @ 01:06 PM by Rockpuck
reply to post by burdman30ott6
I disagree. Since Reagan was in office the monetary policy of the United States has been set and maintained by the economic councils of each President, and have not under any circumstances changed dramatically with the election of a new POTUS. The World economic policy of the US is the same under Reagan as it was under Bush as it was under Clinton, Bush and now Obama. It will be the same under Romney. I imagine if say Romney wanted a dramatic change his economic council will say "no ... you really don't want to do that" If he persist they take him into a dark room and say more menacing "you .. really .. don't want to do that"
But in all seriousness the POTUS has little to no control over economic policy or
foreign aid policy (which is set by Congress) and monetary policy set by the Reserve. But ultimately they all defer to the Banks.
facts indicate that if a GOP candidate is elected POTUS, the aid gravy train to the rest of the world will slow down dramatically. If we're paying our lunch money to some other country to keep them from getting upset I have to ask "Why?" The US is still the biggest, baddest kid in school... why would we ever consider paying money to a bunch of wannabe bully midgets?
I disagree. Since Reagan was in office the monetary policy of the United States has been set and maintained by the economic councils of each President, and have not under any circumstances changed dramatically with the election of a new POTUS. The World economic policy of the US is the same under Reagan as it was under Bush as it was under Clinton, Bush and now Obama. It will be the same under Romney. I imagine if say Romney wanted a dramatic change his economic council will say "no ... you really don't want to do that" If he persist they take him into a dark room and say more menacing "you .. really .. don't want to do that"
But in all seriousness the POTUS has little to no control over economic policy or
foreign aid policy (which is set by Congress) and monetary policy set by the Reserve. But ultimately they all defer to the Banks.
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