tag:blogger.com,1999:blog-1413879796435723871.post2890485693422426900..comments2023-10-24T02:02:57.173-07:00Comments on A Caledonian Journey: "Austerity" and GrowthRhianon Jamesonhttp://www.blogger.com/profile/13627163137265856251noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-1413879796435723871.post-48633713657718441302012-05-09T17:18:29.723-07:002012-05-09T17:18:29.723-07:00(The deleted comment was a duplicate of the one ab...(The deleted comment was a duplicate of the one above, caused by an itchy trigger finger, not me calling anyone a pinko. :))Rhianon Jamesonhttps://www.blogger.com/profile/13627163137265856251noreply@blogger.comtag:blogger.com,1999:blog-1413879796435723871.post-48945575574036093902012-05-09T17:17:12.136-07:002012-05-09T17:17:12.136-07:00This comment has been removed by the author.Rhianon Jamesonhttps://www.blogger.com/profile/13627163137265856251noreply@blogger.comtag:blogger.com,1999:blog-1413879796435723871.post-36681675746336262522012-05-09T17:17:10.759-07:002012-05-09T17:17:10.759-07:00I don't mind a good ideological debate, Mr. Pe...I don't mind a good ideological debate, Mr. Pearse. :)<br /><br />Actually, at the risk of sounding reasonable, I agree with your view that the financial crisis involved some people losing substantial sums while others were bailed out - where "bailed out" means "bailed out with your money." One could debate the merits of specific bailouts - for example, we were told that the US bank bailouts were necessary to keep the entire system from collapsing, and in hindsight didn't cost any taxpayer money (waving hands a bit) - but it's certainly true that some institutions were given a pass, and that sticks in everyone's craw.<br /><br />Having said that, the financial problem with both the US and the European problem children is not the cost of the bailout, but the structural deficits that, by definition, drag on year after year. We can have different views about how that gap should be closed - you might suggest taxing the recipients of bailout largesse, for example (she said cheekily) - but my point is that it's no solution at all to punt the problem down the road.<br /><br />Your "stimulus payment" is, in my humble view, just as dumb an idea as the "partial Social Security tax holiday" the US has had the past two years - not enough to stimulate anything meaningful, and large enough in the aggregate to be real money. The difference, of course, is that Australia could afford it much more than the US. As you point out, Australia is in much better shape than the US or much of Europe - a result of both conservative and liberal governments being more frugal with a dollar in your part of the world. (I will guess, but don't know, that Australia largely escaped the subprime loan debacle, which surely helped during and after the financial crisis.)<br /><br />As far as public health care goes, while you know my position on the subject, I'm not going to be critical of any country that chooses that route. And I would never call you all hippie socialist pinkos - my limited understanding of Australian society is that independence, individualism, and a pragmatic conservatism are all part of the national ethos. If I'm wrong, don't disillusion me!Rhianon Jamesonhttps://www.blogger.com/profile/13627163137265856251noreply@blogger.comtag:blogger.com,1999:blog-1413879796435723871.post-68246188716002204972012-05-09T15:57:39.821-07:002012-05-09T15:57:39.821-07:00At the risk of getting into an ideological debate,...At the risk of getting into an ideological debate, it's true that borrowing a dollar incurs an obligation to pay it back (unless you're a bank who's lost millions on the stock market, or an auto manufacturer, or a corporate financial broker, or...) the problem in many cases is that countries are being asked to pay back money that was "borrowed" by the private sector. <br /><br />Iceland is a perfect example. Many of it's financial institutions lost money in the GFC. Rather than giving these private corporations taxpayer funds to bail them out, they let their banks fail and their "dollar" drop. Three years on they're doing remarkably well, while the US and many European countries wither under austerity.<br /><br />If I borrow a dollar I should pay it back. What has happened is that someone else borrowed a dollar, lost it, and now wants me to pay it back for them.<br /><br />In 2009 the Australian government sent out a $900 "stimulus payment" to everyone who had paid tax in the previous year. Things are a little tight here, but our dollar is higher than the US, our unemployment is around 5% and our economy has been able to avoid the bulk of the nastiness that's hit the rest of the world.<br /><br />But then we're a bunch of hippie socialist pinkos, because we have public healthcare.Edward Pearsehttps://www.blogger.com/profile/16064707444626044745noreply@blogger.com