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Sun Dec 2, 2012, 10:53 PM

Here is something you wont find in our corporate controlled media

"The IMF at it's semi-annual meeting in Tokyo last October announced that the austerity packages applied throughout southern Europe since 2009 have been counterproductive, undermining economic growth and increasing rather then bringing down public debt ratios."

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Reply Here is something you wont find in our corporate controlled media (Original post)
tiredtoo Dec 2012 OP
TheBlackAdder Dec 2012 #1
DJ13 Dec 2012 #2
spedtr90 Dec 2012 #3
DJ13 Dec 2012 #4
AndyTiedye Dec 2012 #5
creeksneakers2 Dec 2012 #6
jeff47 Dec 2012 #7
KurtNYC Dec 2012 #8
JackRiddler Dec 2012 #10
tiredtoo Dec 2012 #12
leftstreet Dec 2012 #9
progressoid Dec 2012 #11

Response to tiredtoo (Original post)

Sun Dec 2, 2012, 11:00 PM

2. K&R..... Do you have a link?

I would love to rub that in a few conservatives faces on another website.

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Response to spedtr90 (Reply #3)

Sun Dec 2, 2012, 11:12 PM

4. Thank you, much appreciated!

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Response to tiredtoo (Original post)

Mon Dec 3, 2012, 12:13 AM

5. Found These in the Financial Times

IMF cuts global growth forecasts

The failure of US and eurozone policy makers to tackle their fiscal woes is threatening an already “slow and bumpy” global economic recovery, the International Monetary Fund has warned.
In its World Economic Outlook, the IMF downgraded its forecasts for global growth next year and provided ammunition to critics of austerity, concluding that governments had systematically underestimated the damage done to growth by tax rises and spending cuts.

The fund points to new analysis showing that governments’ assumptions about the trade-off between fiscal consolidation and growth had been too favourable, and cutbacks would do more damage to output than their economic forecasts predicted.
The IMF said that evidence from 28 countries shows that so-called fiscal multipliers, used by governments to assess the impact on growth of fiscal cutbacks, have underestimated the damage to the economy. “The multipliers used in generating growth forecasts have been systematically too low since the start of the great recession,” the IMF said. A smaller multiplier implies fiscal consolidation is less costly.
Olivier Blanchard, chief economist, indicated on Tuesday that the analysis had influenced the Fund’s policy prescriptions for countries under IMF programmes. Mr Blanchard cited the troika’s recent relaxation of Portugal’s deficit target for 2013 to 4.5 per cent of gross domestic product from 3 per cent, saying: “When the case is fair, we have to get ready to adjust targets given that fiscal multipliers are so large.”
According to the IMF, policy documents seen by fund officials suggest that governments are commonly using fiscal multipliers of about 0.5 to calculate the impact of austerity on growth. A multiplier of 0.5 would mean that for every $1 lost in government spending, 50 cents is wiped from output.
“Our results indicate that multipliers have actually been in the 0.9 to 1.7 range since the great recession,” the fund said.


High fiscal multipliers undermine austerity programmes

That article, written by IMF chief economist Olivier Blanchard and Daniel Leigh, presented evidence that the fiscal multiplier in the advanced economies is considerably larger than had been assumed when fiscal austerity plans were set in train in most economies in 2010. The implication, if they are right, is that austerity is much more damging to output in the near term than was anticipated. As a result, the planned fiscal retrenchment could be hard to sustain in the next few years, not only in the eurozone but in the US and UK as well. In fact, we are already seeing signs of this in peripheral Europe and the UK.

It is no wonder that many Keynesians (see for example this blog by Paul Krugman) have welcomed the IMF article as a vindication of their earlier warnings about the dangers of austerity. The Blanchard/Leigh paper shows that there is a cross-country relationship between GDP performance in 2010/11 and the relative size of the fiscal tightening that was announced in 2010: those countries with the largest tightening tended to have the worst outcome for GDP growth, relative to 2010 expectations.

The authors believe that this is because the fiscal multipliers have turned out to be higher than was assumed when the austerity programmes were designed. In fact, they suggest that the multiplier under current circumstances might be as large as 0.9-1.7, compared with the initial assumption of 0.5.

If, however, the multiplier is 1.7, then the same initial public spending cut of 1 per cent of GDP would reduce real output by 1.7 per cent. The second round effects of this reduction in output would reduce tax or raise transfers by 0.68 per cent. The net overall improvement in the budget deficit would therefore be only 0.32 per cent. The economy would be in recession, and the budget deficit would hardly improve at all. Even if this were acceptable to governments, it would not be acceptable for very long to their electorates.

http://blogs.ft.com/gavyndavies/2012/10/21/high-fiscal-multipliers-undermine-austerity-programmes/ (might be behind a paywall)

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Response to tiredtoo (Original post)

Mon Dec 3, 2012, 12:47 AM

6. What is the alternative?

A country can't borrow without limit. When a credit card binge ends and the credit cards are cut up life changes drastically.

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Response to creeksneakers2 (Reply #6)

Mon Dec 3, 2012, 01:31 AM

7. Actually, a country can borrow without limit.

Countries with their own currencies can literally print money.

The EU can borrow with virtually no limit and send the money to the nations that need stimulus.

Oh, and this part:
When a credit card binge ends and the credit cards are cut up life changes drastically.

is a lie.

There was no credit binge. Germany had a booming economy, and many Germans decided to buy real estate in other parts of Europe, especially Southern Europe. They thought that by being in the EU, these countries would be stable investments. However, this created a bubble, which imploded and the Germans pulled their money out, crashing the economies of these countries.

Germans and other deficit scolds are now busy lying about this, insisting that these countries had massive deficits before Germany fucked them over. This isn't true - most of them had reasonable debt or were even running budget surpluses. But it means the evil Spaniards/Italians/etc are at fault, and not the noble Germans.

The only country that was being financially stupid was Greece. The EU should have never let them join the Euro. But everyone was sure being in the EU created magic economic stability. But all the rest of the countries that are now in trouble were doing very well up until the bubble burst.

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Response to KurtNYC (Reply #8)

Mon Dec 3, 2012, 10:47 AM

10. It's nice that they cover it in articles...

and they usually do, but mass media are an attention economy. This reality-based reporting is in the background somewhere, lost behind Kardashian-type stories, while the few political headlines scream about "fiscal cliff" and "entitelements" and "credit binges" and other basically right-wing or Austrian economics myths.

And then turn on the TV: What do you see? Where is Lagarde on FOX, the 3 US networks, CNN, or even MS-NBC? What are they covering around the clock? What are they SCREAMING about around the clock?

It's not enough to front the bullshit while you turn the real story into an easily ignored footnote and then pretend you've given proper coverage to the issues.

In a way it would be better if they didn't cover it because then some people would notice the distortion. As it is, token coverage gives an excuse.

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Response to JackRiddler (Reply #10)

Mon Dec 3, 2012, 09:08 PM

12. Excellent points here.

And I have yet to see anything but cutting entitlements as the only way to go in the media. Again I say corporate controlled media.

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