tag:blogger.com,1999:blog-3448927642739850334.post9117894909038990207..comments2023-10-29T08:06:00.610+00:00Comments on The Political Economist: UK recovery policy – Austerity! What austerity?Vuk Vukovichttp://www.blogger.com/profile/01878567452492217960noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-3448927642739850334.post-9643710227332231412012-02-28T12:53:45.972+00:002012-02-28T12:53:45.972+00:00No one is disputing the existence of the more than...No one is disputing the existence of the more than necessary cuts, but I think the point was made here:<br /><br />"Yes, some painful cuts have been made, tuitions were rising, unions were hit, wages in the public sector are stagnant, a lot of public sector workers have been laid off, but what does the government do with this saved up money? It invests into credit easing, housing subsidies, the youth contract and infrastructural projects..."<br /><br />That is the unfortunate problem - how was the saved up money used. It was used to engage in a fiscal stimulus of the UK economy. This is why I emphasize the ambiguity in their policies; austerity in rhetoric and stimulus in practice.<br /><br />Also, comparing in absolute terms is bound to be biased in this case since the UK economy now is far bigger than it ever was before (GDP trend is always rising), just as it is for almost any country in the world. This is why it's much more precise to look at relative indicators (which I have shown in the graph), as upon them we are able to draw comparisons.Vuk Vukovichttps://www.blogger.com/profile/01878567452492217960noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-9861975883359568272012-02-27T22:55:11.019+00:002012-02-27T22:55:11.019+00:00the UK has an obvious austerity policy! how else w...the UK has an obvious austerity policy! how else would you explain so many cuts done by the government? the cuts are in absolute terms the biggest in UK history, and the largest anywhere else in the world (by size at least). Also there has never been more than two years of consecutive cuts in the UK, while Osborne wants to extend this to a total of 7 years! I can think of only one name for 7 years of budget cuts - austerityCarolnoreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-56560756644793170092012-02-26T20:49:56.400+00:002012-02-26T20:49:56.400+00:00Indeed, what austerity!?Indeed, what austerity!?Mikehttps://www.blogger.com/profile/14413273098082958690noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-62820330494465416432012-02-26T20:43:24.679+00:002012-02-26T20:43:24.679+00:00Austerity? You mean wannabe austerity? :)Austerity? You mean wannabe austerity? :)Vuk Vukovichttps://www.blogger.com/profile/01878567452492217960noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-62356210098049781722012-02-26T20:31:15.214+00:002012-02-26T20:31:15.214+00:00I don't believe the UK would have found itself...I don't believe the UK would have found itself in the same problems the peripheral eurozone did. There are certain structural differences that make the UK more resillient towards a sovereign debt crisis. In any case of repaying debt the most important thing is credibility, which the UK certainly has a lot. The proof are in fact the low yields and an AAA rating despite having a worse fiscal situation than France for example, whose AAA was cut down. <br /><br />I'm not saying keeping the yields low was a bad thing, but it's worrying that this is the only thing they have managed to do with the austerity policy.Mikehttps://www.blogger.com/profile/14413273098082958690noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-51922589668132718262012-02-25T13:22:25.832+00:002012-02-25T13:22:25.832+00:00Surely you must agree that having to avoid a sover...Surely you must agree that having to avoid a sovereign debt crisis is a sort of a success.John Turpinhttps://www.blogger.com/profile/03146853575797586917noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-18250154649858014202012-02-24T23:59:04.328+00:002012-02-24T23:59:04.328+00:00I agree, the government is offering a weird mix of...I agree, the government is offering a weird mix of policies allegedly aimed at growth and keeping a low bond yield. They only managed to achieve the later, only to be able to take on more debt for a lower price. And they call this a success?Mikehttps://www.blogger.com/profile/14413273098082958690noreply@blogger.comtag:blogger.com,1999:blog-3448927642739850334.post-62618514123497558952012-02-24T12:38:03.561+00:002012-02-24T12:38:03.561+00:00Nice graph! A great example of what the UK needs r...Nice graph! A great example of what the UK needs right now - more clarity!Charlienoreply@blogger.com