Is austerity working- and will it ever end?

[Cyclone]

The idea of austerity was to return to a neutral spend, e.g not increase the debt, or attempt to slow its growth.

It's impossible to say what the debt would have been if the spending cuts had not been made.

But we can't continually increase national debt.

 

It's possible to look at other similar european countries that didn't follow policies of austerity and compare how they've done with how we've done.

 

---------- Post added 10-10-2018 at 08:10 ----------

 

Austerity was never meant to reduce our debt.

 

It was meant to reduce our deficit, which in turn prevented our national debt from ballooning much higher than it would have done otherwise.

 

Until we tackled the deficit the debt is obviously going to continue to grow. That was the point of austerity, and it's done a pretty good job..

 

I disagree about the last sentence. Countries that haven't followed austerity policies have done a much better job of controlling deficit.

[El Cid]

I disagree about the last sentence. Countries that haven't followed austerity policies have done a much better job of controlling deficit.

 

Do you know enough about the economics of many countries, in order to make that statement?

[woodview]

It's possible to look at other similar european countries that didn't follow policies of austerity and compare how they've done with how we've done.

 

---------- Post added 10-10-2018 at 08:10 ----------

 

 

I disagree about the last sentence. Countries that haven't followed austerity policies have done a much better job of controlling deficit.

Presumable you are talking about government spending to stimulate growth and subsequently tax receipts?

It still maeans at some stage, you have to stop running a defecit to reduce the debt.

[the_bloke]

Interesting using Sweden as a comparison; in the 1990s the economy crashed and they had a period of austerity to recover from the mess they were in.

[Robin-H]

It's possible to look at other similar european countries that didn't follow policies of austerity and compare how they've done with how we've done.

 

---------- Post added 10-10-2018 at 08:10 ----------

 

 

I disagree about the last sentence. Countries that haven't followed austerity policies have done a much better job of controlling deficit.

 

Which countries?

[Bob Arctor]

I think we've established fairly conclusively that the austerity measures have not reduced the national debt, which brings us to lil-minx92's other question: Was this even the *point* of the austerity measures?

 

There are only two possibilities.

 

Either it *was* the point, in which case it's been a spectacular failure; or it wasn't, in which case somebody has been telling porkies since (pre-Brexit) we were constantly being assured that the national debt was the number one problem facing the nation, and that austerity was being followed precisely in order to reduce it.

 

Thirdly, it's possible (I would say probable) that the point of austerity was to meet a right wing ideological desire to shrink the role of the state, using the financial crisis and corresponding slump in tax revenue as cover. The Tories have shown themselves to be particularly ideologically opposed to local government and the effects of that are really starting to bite now, even in Tory-run councils. In fact, Tories in local government who believe in local government are almost in a different party to national Tory politicians.

[Cyclone]

Which countries?

 

https://www.theguardian.com/commentisfree/2017/aug/24/austerity-lie-deep-cuts-economy-portugal-socialist

 

---------- Post added 11-10-2018 at 07:29 ----------

 

Do you know enough about the economics of many countries, in order to make that statement?

 

Do you know enough to question it?

 

Why not just google it and find out?

 

---------- Post added 11-10-2018 at 07:30 ----------

 

Presumable you are talking about government spending to stimulate growth and subsequently tax receipts?

It still maeans at some stage, you have to stop running a defecit to reduce the debt.

 

I didn't make any claim that we wouldn't ultimately need to stop running a deficit. I DID claim that austerity wasn't a quick route to achieving that aim, we still haven't achieved it have we.

[alchresearch]

https://www.theguardian.com/commentisfree/2017/aug/24/austerity-lie-deep-cuts-economy-portugal-socialist

 

Ah, Portugal.

 

Months of strikes from teachers demanding nine years of frozen salary increments.

 

The Lisbon Business School saying:

 

The formula is based on an “illusion” of relieving austerity that is unsustainable and damaging to the long-term health of the economy.

 

“The idea that austerity has been reversed is a myth,” said Pedro Santa-Clara, professor of finance at Lisbon’s Nova School of Business and Economics.

 

“In fact, increased current spending has been more than offset by drastic cuts in public investment, higher taxation and lower social transfers.”

 

Others saying things like:

 

the fine line the government has tried to follow “is becoming increasingly difficult to maintain as the impact on public services becomes more tangible and growth shows signs of slowing”.

 

More important drivers, economists say, include the impact of international growth on exports, a tourism boom and a drop in interest rates that has sharply reduced the cost of servicing Portugal’s huge public debt.

 

Failing state services, including overstretched hospitals and a rundown railway network, as evidence that the government has cut back on public investment to offset its largesse towards public sector workers. Income tax cuts have been counterbalanced by higher indirect taxes, they add.

[truman]

It's possible to look at other similar european countries that didn't follow policies of austerity and compare how they've done with how we've done.

 

---------- Post added 10-10-2018 at 08:10 ----------

 

 

I disagree about the last sentence. Countries that haven't followed austerity policies have done a much better job of controlling deficit.

 

From the ONS

 

"The annual deficit, as a percentage of GDP, for the financial year ending March 2018, was the lowest since the financial year ending March 2002 when it was 0.4%. In the calendar year 2017, the UK government deficit was £36.2 billion (1.8% of GDP), a decrease of £21.8 billion compared with the calendar year 2016."

 

It's a fair size drop in all fairness..

[woodview]

 

I didn't make any claim that we wouldn't ultimately need to stop running a deficit. I DID claim that austerity wasn't a quick route to achieving that aim, we still haven't achieved it have we.

But do you agree, at some stage, we have to stop running a defecit? For whatever reasons, we have an all-time high national debt, when is the right time to act?