No to Austerity!

[Yorkshire 53]

It doesn't appear that you actually know what the fractional-reserve banking practice is.

 

How observant ! As I said re understanding it , " I'm only part way there" and seeking opinions.

[Pinkman]

How observant ! As I said re understanding it , " I'm only part way there" and seeking opinions.

 

On Sheffield Forum? Yeah, good luck with that. It's already descended into one per center rhetoric.

[Cyclone]

No, I think it helps to be part of the club.

 

Don't forget a few (very few) economists tried to bow the whistle before the 2008 crash, and lost there jobs, their credibility, and were ostracised.

 

NOT on fractional reserve banking... On the credit derivatives that were being repackaged, fraudulently rated and missold.

[Staunton]

No, sending people to jail doesn't help an economy to recover.

 

Iceland devalued their currency which made their exports very cheap and popular, and also made tourism cheap. But guess what, they also introduced AUSTERITY!

 

Amazing isn't it. Shows you have no idea what you are talking about.

 

The first port of call for an economy in crisis is the International Monetary Fund. No surprise, the disaster capitalist project that essentially characterises IMF policy demanded that, in return for a financial rescue package, Iceland must immediately cut spending on health by 30%, cynically defining healthcare as a 'luxury'. But Iceland's minister for health refused to implement the IMF proposal, and resigned.

 

Iceland's policy was instead shaped by a firm commitment to the provision of a secure social fund. Identifying the IMF model as flawed since it failed to take account of the multiplier effect of government spending, an important economic factor in the austerity debate, as Cyclone has implied elsewhere on sheffieldforum ( see the thread Why I'm a conservative, post #26 ). Instead, Iceland's economists used data evidence to shape a policy of increased public spending. Rejecting the IMFs austerity demands, Iceland borrowed from Poland, and from other Scandinavian states and accepted some limited IMF support on the understanding that there would be no programme of austerity.

 

US economist Paul Krugman stated that where other countries had 'bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually strengthened the social safety net ( see http://www.nytimes.com/2011/10/28/opinion/krugman-the-path-not-taken.html?mcubz=2 ). There certainly was hardship for Iceland in the aftermath of the financial scandal of 2008, but the country recovered quickly and actually improved the health and wellbeing of its citizens in the process by a determined effort to support the social infrastructure and ensure the pain was shared.

Edited June 21, 2017 by Staunton

[Supertramp]

The first port of call for an economy in crisis is the International Monetary Fund. No surprise, the disaster capitalist project that essentially characterises IMF policy demanded that, in return for a financial rescue package, Iceland must immediately cut spending on health by 30%, cynically defining healthcare as a 'luxury'. But Iceland's minister for health refused to implement the IMF proposal, and resigned.

 

Iceland's policy was instead shaped by a firm commitment to the provision of a secure social fund. Identifying the IMF model as flawed since it failed to take account of the multiplier effect of government spending, an important economic factor in the austerity debate, as Cyclone has implied elsewhere on sheffieldforum ( see the thread Why I'm a conservative, post #26 ). Instead, Iceland's economists used data evidence to shape a policy of increased public spending. Rejecting the IMFs austerity demands, Iceland borrowed from Poland, and from other Scandinavian states and accepted some limited IMF support on the understanding that there would be no programme of austerity.

 

US economist Paul Krugman stated that where other countries had 'bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually strengthened the social safety net ( see http://www.nytimes.com/2011/10/28/opinion/krugman-the-path-not-taken.html?mcubz=2 ). There certainly was hardship for Iceland in the aftermath of the financial scandal of 2008, but the country recovered quickly and actually improved the health and wellbeing of its citizens in the process by a determined effort to support the social infrastructure and ensure the pain was shared.

Instead of fluffing out a load of baloney why not answer the following questions

 

 

Did Iceland implement austerity measures?

We're they or were they not bigger cuts in terms of GDP than the UK, Ireland, Spain etc?

[Staunton]

Instead of fluffing out a load of baloney why not answer the following questions

 

Did Iceland implement austerity measures?

We're they or were they not bigger cuts in terms of GDP than the UK, Ireland, Spain etc?

 

In 2009, following a popular revolt, a new caretaker government came to power that enshrined welfare at the heart of its response to the financial scandal of 2008. This government was effectively a coalition comprising the Social Democratic Alliance and the Left Green Movement. They systematically protected people on low and middle-incomes and refused to cut the welfare state. Indeed, welfare spending was carefully ringfenced. Iceland chose instead to raise taxes for higher earners and reduce taxation on lower income citizens. There were certainly cuts, and you can label these as austerity if you so choose, but these cuts were carefully calibrated to affect higher income groups, those most advantageously placed to absorb the impact. These measures were so successful that they actually reduced inequality simultaneously with their highly effective response to the scandal.

[Hairyloon]

The FT disagrees. None of the increase in CT revenue is down to a lower rate.

 

https://www.ft.com/content/ca3e5bd2-2a7e-11e7-9ec8-168383da43b7?mhq5j=e1

 

How can you set any store in a publication that bases its reporting on facts and reasoned discussion?! Where is the appeal to base instinct and emotional hyperbole?

[Supertramp]

In 2009, following a popular revolt, a new caretaker government came to power that enshrined welfare at the heart of its response to the financial scandal of 2008. This government was effectively a coalition comprising the Social Democratic Alliance and the Left Green Movement. They systematically protected people on low and middle-incomes and refused to cut the welfare state. Indeed, welfare spending was carefully ringfenced. Iceland chose instead to raise taxes for higher earners and reduce taxation on lower income citizens. There were certainly cuts, and you can label these as austerity if you so choose, but these cuts were carefully calibrated to affect higher income groups, those most advantageously placed to absorb the impact. These measures were so successful that they actually reduced inequality simultaneously with their highly effective response to the scandal.

 

Ok lots of blurb around it.

But yes they implemented massive austerity. Thanks.

 

Double what the UK did.

 

 

So no they did not reject austerity, they went big on austerity as well as capital controls.

[Staunton]

Austerity politics has been rejected! We can hope for a fairer politics, hope for social responsibility,.. We have much to celebrate!

 

Austerity is an ideologically motivated means to shift wealth from the poor to the rich, as characterised by conservative party policy since 2010. This cynical and exploitative form of policy was comprehensively rejected by Iceland. The Icelandic government chose instead to respond to the financial scandal of 2008 by letting their criminal banks fail, putting their corrupt bankers in prison, and protecting their public sector and their low and middle income citizens.

 

As I said in my OP, we have much to celebrate and ,as yesterday's Queen's Speech demonstrates, Theresa May's abusive and cynical manifesto is dead.

[Cyclone]

So Iceland had a bigger financial crisis, did more austerity, and had higher interest rates than Ireland, but has still managed to recover more. How is that possible? Well, it's not just that Iceland let its banks go bust, while Ireland bailed its out. Reality is a little more complicated. It's true that Ireland ran up a lot of debt guaranteeing its banks, but it's also true that it restructured that debt in 2013 in a way that effectively cut 40 percent of it. That's a quiet default, or at least half of one.

 

No, the biggest difference between the two is that Iceland has its own currency and Ireland has the euro. See, when the crisis hit, both countries discovered that their now-burst bubbles had just masked how uncompetitive they'd become. Their people were getting paid too much, relative to the rest of the world, for the work they were doing.

 

Apparently Iceland DID do austerity.