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Filed: Citizen (pnd) Country: Ireland
Timeline
Posted

I was reading today about how Romania after getting into economic difficulties in the 1970s was forced to seek a bailout from the IMF. After years of Austerity by following IMF prescriptions, was finally able to repay the money loaned to it by 1989. Interestingly enough, at the end of the same year, Nicolae Ceausescu, the then president, and wife put against a wall and shot at the behest of a unappreciative populous by the Romanian army.

Oct 19, 2010 I-130 application submitted to US Embassy Seoul, South Korea

Oct 22, 2010 I-130 application approved

Oct 22, 2010 packet 3 received via email

Nov 15, 2010 DS-230 part 1 faxed to US Embassy Seoul

Nov 15, 2010 Appointment for visa interview made on-line

Nov 16, 2010 Confirmation of appointment received via email

Dec 13, 2010 Interview date

Dec 15, 2010 CR-1 received via courier

Mar 29, 2011 POE Detroit Michigan

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Jan 10, 2013 I-751 packet mailed to Vermont Service CenterJan 15, 2013 NOA1

Jan 31, 2013 Biometrics appointment letter received

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June 14, 2013 RFE

June 24, 2013 Responded to RFE

July 24, 2013 Removal of conditions approved

Filed: IR-1/CR-1 Visa Country: Colombia
Timeline
Posted

Facts, evidence? Where? You haven't posted a single verifiable fact or shred of evidence. Just lots of snarky comment and dubious claims regarding the merits of austerity.

You are of course correct - in my defense I did not expect anyone to actually read my post. Sometimes when you read a thread such as this it is a little bit therapeutic to spit in the wind.

At the risk of being snarky (sorry it will seep through when dealing with this subject): You do have at your fingertips a great tool for researching... If you are looking for answers go to a search engine, type in something neutral "debt effects on an economy", find a few reputable sources, check any peer reviewed journals against the current blacklists (sadly both the left and right have many "journals" starting a few years ago) and make your own decisions on the subject.

For some of the others here who are not looking for answers but only confirmation of what they want to be true then do the usual... Go to your favorite search engine, type in some biased search text like "austerity hurting economy" pick out the articles that best fit what you want to be true and feel good again.

--

To your original complaint:

A good paper on the subject is here: The Real Effects of Debt

Here is the abstract:

"At moderate levels, debt improves welfare and enhances growth. But high levels can be

damaging. When does debt go from good to bad? We address this question using a new

dataset that includes the level of government, non-financial corporate and household debt in

18 OECD countries from 1980 to 2010. Our results support the view that, beyond a certain

level, debt is a drag on growth. For government debt, the threshold is around 85% of GDP.

The immediate implication is that countries with high debt must act quickly and decisively to

address their fiscal problems. The longer-term lesson is that, to build the fiscal buffer

required to address extraordinary events, governments should keep debt well below the

estimated thresholds. Our examination of other types of debt yields similar conclusions.

When corporate debt goes beyond 90% of GDP, it becomes a drag on growth. And for

household debt, we report a threshold around 85% of GDP, although the impact is very

imprecisely estimated."

And from the conclusion (page 21)

"A clear implication of these results is that the debt problems facing advanced economies are even worse than we thought. Given the benefits that governments have promised to their populations, aging will sharply raise public debt to much higher levels in the next few decades. At the same time, aging may reduce future growth and may also raise interest rates, further undermining debt sustainability. So, as public debt rises and populations age, growth will fall. As growth falls, debt rises even more, reinforcing the downward impact on an already low growth rate. The only possible conclusion is that advanced countries with high debt must act quickly and decisively to address their looming fiscal problems. The longer they wait, the bigger the negative impact will be on growth, and the harder it will be to adjust. It is important to note that our finding of a threshold for the effects of public debt on growth does not imply that authorities should aim at stabilizing their debt at this level. On the contrary, since governments never know when an extraordinary shock will hit, it is wise to aim at keeping debt at levels well below this threshold."

As with government debt, we have known for some time that when the private sector becomes highly indebted, the real economy can suffer.46 But, what should we do about it? Current efforts focus on raising the cost of credit and making funding less readily available to would-be borrowers. Maybe we should go further, reducing both direct government subsidies and the preferential treatment debt receives. In the end, the only way out is to increase saving."

I don't believe it.. Prove it to me and I still won't believe it. -Ford Prefect

Filed: Timeline
Posted (edited)

Again, nobody is seriously saying that governments can rack up debt indefinitely without there being a high price to pay. The question is whether austerity is correct medicine to reign in government debt in the middle of a recession - some actually refer to Europe as a depression by now. Looking at Europe which has pursued this path for almost half decade now, the economic output in 2013 is still below that of 2008. This means that even if no new debt was accumulated, the debt to GDP ratio would still be higher today than it was back then.

Europe finds itself in a perpetual recession and rising government debts. This has already led to an unemployment rate of 12% across the continent and unemployment rates close to 30% in some countries (Greece and Spain). There is still no economic growth on the horizon for the continent this year - the sixth year of economic decline. With the economic decline, debt levels are guaranteed to rise further. And further. And further. Until Europe starts pursuing economic growth policies.

Edited by Mr. Big Dog
Filed: AOS (apr) Country: Canada
Timeline
Posted

Generally I avoid trading posts with some of you you because quite frankly you live for your agenda and are so biased and self-certain that I don't think any facts or evidence can sway your thought process.

But I am going to try...

For some countries borrowing like a mad man makes sense. Brazil for example, or India. These countries are on the low end of their growth cycle and can look forward to many years of double digit growth in their economies. Any drag from debt would be far outweighed by the growth in the strength of their currency and the added infrastructure.

Another example would be a mature economy that goes through a recession.. Germany is the best example here.. If they suddenly went through very tough times they could borrow a lot of money for a moderate amount of time with little interest and the benefits would outweigh the consequences.

We are a mature economy with a heavy debt load. We get less benefit from heavy spending than developing economies... They can experience double digit growth, we can't... and because we have been dependent on debt for so long we no longer use it to build infrastructure or build the economic machine. We use it as fuel - we pay the debt load and keep the basic economic machinery running.

That is the cycle of debt if not managed properly - it goes from promoting growth to eventually maintaining the status quo and finally staving off collapse. This is not in dispute by economists. The argument is where in the cycle we are and how far debt can be pushed before an inevitable collapse occurs.

Austerity is not a tool.. When a country has gone too far and can no longer borrow money (eventually they will no longer be able to borrow money) choices have to me made by that country.. They can just print money and devalue the currency, they can go to war, they can be bailed out by another country, they can default on the money they owe, or they can live below their means and pay down the debt load.

That last one is called "Austerity".. Raising taxes, lowering spending and not borrowing. Some of you like to make fun of it, but when a country runs out of options and there is no one left to lend them money which direction do you suggest? All of those previous options have been used by countries before so you can go research the various outcomes. Suggest a possible course for these countries with heavy debt load ... please don't start with "borrow more money"

When I see posts on austerity being some evil tool - It's like a drug addict being told that quitting is going to create a whole lot of withdrawal and incredible pain. Taking another hit would feel so much better and we can deal with that addiction thing later on when we are stronger and more able... I guess it is technically true and we can post articles about how awful the withdrawal is compared to that sweet last hit.. You can imagine how I feel about the morality of the person selling that line and the intelligence of those that believe it.

Did any of that sink in or did you just go to Google or your list of think-same bloggers for ways to make you feel better about your already formed opinion?? Yeah I thought so...

Well said. My thought on taking on debt was that it would only be ok if the debt went directly towards a growth rate that would compensate for the debt rate. Like you mentioned, this is difficult when you aren't a developing nation. I suppose if a new technology or industry was created, money could be pumped into it but it would have to be on the level of nationwide infrastructure building as well as carrying similar growth rates.

Filed: Citizen (pnd) Country: Ireland
Timeline
Posted

Again, nobody is seriously saying that governments can rack up debt indefinitely without there being a high price to pay. The question is whether austerity is correct medicine to reign in government debt in the middle of a recession - some actually refer to Europe as a depression by now. Looking at Europe which has pursued this path for almost half decade now, the economic output in 2013 is still below that of 2008. This means that even if no new debt was accumulated, the debt to GDP ratio would still be higher today than it was back then.

Europe finds itself in a perpetual recession and rising government debts. This has already led to an unemployment rate of 12% across the continent and unemployment rates close to 30% in some countries (Greece and Spain). There is still no economic growth on the horizon for the continent this year - the sixth year of economic decline. With the economic decline, debt levels are guaranteed to rise further. And further. And further. Until Europe starts pursuing economic growth policies.

Exactly, the austerions are attempting to fight the next war, while refusing to notice that the current war is raging.

Oct 19, 2010 I-130 application submitted to US Embassy Seoul, South Korea

Oct 22, 2010 I-130 application approved

Oct 22, 2010 packet 3 received via email

Nov 15, 2010 DS-230 part 1 faxed to US Embassy Seoul

Nov 15, 2010 Appointment for visa interview made on-line

Nov 16, 2010 Confirmation of appointment received via email

Dec 13, 2010 Interview date

Dec 15, 2010 CR-1 received via courier

Mar 29, 2011 POE Detroit Michigan

Feb 15, 2012 Change of address via telephone

Jan 10, 2013 I-751 packet mailed to Vermont Service CenterJan 15, 2013 NOA1

Jan 31, 2013 Biometrics appointment letter received

Feb 20, 2013 Biometric appointment date

June 14, 2013 RFE

June 24, 2013 Responded to RFE

July 24, 2013 Removal of conditions approved

Filed: Citizen (pnd) Country: Ireland
Timeline
Posted

You are of course correct - in my defense I did not expect anyone to actually read my post. Sometimes when you read a thread such as this it is a little bit therapeutic to spit in the wind.

At the risk of being snarky (sorry it will seep through when dealing with this subject): You do have at your fingertips a great tool for researching... If you are looking for answers go to a search engine, type in something neutral "debt effects on an economy",

Not, quite clear on the concept of a discussion forum, now are we?

Oct 19, 2010 I-130 application submitted to US Embassy Seoul, South Korea

Oct 22, 2010 I-130 application approved

Oct 22, 2010 packet 3 received via email

Nov 15, 2010 DS-230 part 1 faxed to US Embassy Seoul

Nov 15, 2010 Appointment for visa interview made on-line

Nov 16, 2010 Confirmation of appointment received via email

Dec 13, 2010 Interview date

Dec 15, 2010 CR-1 received via courier

Mar 29, 2011 POE Detroit Michigan

Feb 15, 2012 Change of address via telephone

Jan 10, 2013 I-751 packet mailed to Vermont Service CenterJan 15, 2013 NOA1

Jan 31, 2013 Biometrics appointment letter received

Feb 20, 2013 Biometric appointment date

June 14, 2013 RFE

June 24, 2013 Responded to RFE

July 24, 2013 Removal of conditions approved

Filed: IR-1/CR-1 Visa Country: Colombia
Timeline
Posted (edited)

Not, quite clear on the concept of a discussion forum, now are we?

Well you can never accuse me of being snarky again can you :whistle: Some threads you just know who the audience will be: a multi-paragraph *AND* against extremist-left think in an austerity thread? No I was not expecting much in the way or anyone reading or replying... maybe a few insults from the usual suspects.. I think I said as much at the top - something to that effect anyway.

I hope you will note that I did reply to your point and did provide sourcing. I was a bit disappointed at the lack of any real substance in your reply.

Every fringe group has it's sacred cows that they fight even in the face of what is painfully obvious... The religious right goes after evolution, the extremist right goes after global warming, and on and on.. Austerity is being attacked because some people have so much hate for the tea-baggers... Discrediting a group is more important than the subject and is the real goal here.

I would urge anyone when these type of fringe people post to just go to a search engine and type in a neutral search term on the subject and get the facts for themselves.

Edited by OnMyWayID

I don't believe it.. Prove it to me and I still won't believe it. -Ford Prefect

Filed: Citizen (pnd) Country: Ireland
Timeline
Posted

Well you can never accuse me of being snarky again can you :whistle:

What can I say, you bring the worst out in me.

Some threads you just know who the audience will be: a multi-paragraph *AND* against extremist-left think in an austerity thread?

Well what can I say, you replied using a quote from a paper which basically said it was wise for governments to attempt to have buffer against possible future shocks, mr Mr Big dog stated in his reply that he didn't disagree with this position, but perhaps now was possibly the best time to implement austerity, I replied that I agreed. This is basic keynesian economics, and you know doubt can find hundreds if not thousands of papers from economists in support of this approach, and an equal number saying the opposite, I'm sure.

This is not an academic website, and as such opinions posted here, much like the Reinhart-Rogoff paper are not required to be peer reviewed before posting.

If you want to hide behind economists you approve of, that is fine, but please do not insult other people just because they hold more so called left-wing view points than you and pretend that only serious economists are neither left nor right in political outlook. This is just an excuse to dismiss arguments without having to give them any real thought.

No I was not expecting much in the way or anyone reading or replying... maybe a few insults from the usual suspects.. I think I said as much at the top - something to that effect anyway.

You start off making snide remarks about people on this forum, and now you are complaining about insults from the usual suspects. You seem to want it both ways.

I hope you will note that I did reply to your point and did provide sourcing. I was a bit disappointed at the lack of any real substance in your reply.

See above.

Every fringe group has it's sacred cows that they fight even in the face of what is painfully obvious... The religious right goes after evolution, the extremist right goes after global warming, and on and on.. Austerity is being attacked because some people have so much hate for the tea-baggers... Discrediting a group is more important than the subject and is the real goal here.

Hate the tea-baggers? I nearly forgot those guys are even still around!

I would urge anyone when these type of fringe people post to just go to a search engine and type in a neutral search term on the subject and get the facts for themselves.

People who demand neutrality in any situation are usually not neutral but in favor of the status quo.

Max Eastman

Oct 19, 2010 I-130 application submitted to US Embassy Seoul, South Korea

Oct 22, 2010 I-130 application approved

Oct 22, 2010 packet 3 received via email

Nov 15, 2010 DS-230 part 1 faxed to US Embassy Seoul

Nov 15, 2010 Appointment for visa interview made on-line

Nov 16, 2010 Confirmation of appointment received via email

Dec 13, 2010 Interview date

Dec 15, 2010 CR-1 received via courier

Mar 29, 2011 POE Detroit Michigan

Feb 15, 2012 Change of address via telephone

Jan 10, 2013 I-751 packet mailed to Vermont Service CenterJan 15, 2013 NOA1

Jan 31, 2013 Biometrics appointment letter received

Feb 20, 2013 Biometric appointment date

June 14, 2013 RFE

June 24, 2013 Responded to RFE

July 24, 2013 Removal of conditions approved

 

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