DEBATE WITH AN “ACCREDITED (KRUGMANITE) ECONOMIST” ON “SOCIALIST” SWEDEN AND AUSTERITY ECONOMICS

FROM APOLLOSPEAKS' TOWNHALL ARCHIVES

2013-08-01 17:08 DEBATE WITH AN "ACCREDITED (KRUGMANITE) ECONOMIST" ON  "SOCIALIST" SWEDEN  AND AUSTERITY ECONOMICS


business

The Complete Failure Of

Austerity

by
 
  AUSTERITY NEVER WORKS

claims HuffPo blogger Mark Gongloff, Paul Krugman and other neo-Keynesian ideologues on the bankrupt tax and spend Left for nations deep in debt and economic distress; it never works except when it does, as when Sweden (the model socialist democratic state?) in the 1990s, drastically cut taxes, spending and regulations and privatized national industries to save it from the fate of broken, busted. bankrupt socialist Greece. Or as when Harding and Coolidge in the 1920s slashed taxes, spending and regulations and unleashed the economic volcano of the Roaring Twenties-cutting Wilson's post-war depression jobless rate of 12% to 1.5% in five years-unmatched until World War II. Austerity never works, except when it does and has to, as there is no better alternative.
 
Below is a debate I had on HuffPo triggered by my post with grazer333, a self-proclaimed "accredited (Krugmanite) economist." Unlike this man with his degrees (if he has any) I had one semester of economics at college where I majored in Greek Philosophy. But I'm a Conservative and reader of books with good instincts and economic common sense, and in the end the Krugmanite with all his sophistication, analysis and learning was no match for me as you shall see.
 

retrosdad writes 

Good post Apollo. And I agree: "Austerity never works, except when it does." Krugman is like most liberals. They give opinions, editorialize and legislate thinking that such efforts will mold reality into what they want, demand and expect. However, reality didn't get the memo and therefore does as it pleases. The liberals will never learn until it is too late for us all.

grazer333  replies

Paul Krugman, like me, is an accredited economist. He has gone to school and has studied up and learned to understand market forces and the economy using a SCIENTIFIC approach. You and Apollo, on the other hand, are the ones that lack qualifications for commenting on this issue because neither of you have been trained to think or to analyze economics in a scientific and thorough fashion. Why don't you tell medical doctors how to do their jobs while you are at it? You should put a lid on it, guys.

 

My reply

QUESTION?

 How can a government stimulate a distressed economy into robust growth when there's a growing culture of dependency where an increasing number of citizens at an alarming rate  are receiving more in government benefits, handouts and free stuff than they're paying in taxes? Borrow and spend all the money you want to get a temporary kick in demand as more and more citizens become non-productive how do we avoid the catastrophe of Detroit and Greece? Is David Stockman right when he says that we are seeing the Death of the Keynesian State? Without austerity, discipline and a revival of the work ethic how can we avoid this terrible fate? How?! What follows is the Krugmanite's sophisticated non-answer

photo
grazer333   July 24, 2013 at 1:53amAh. Yes, and here come the amateurish assumptions. First off. As an accredited economist, I am going to advise you to knock it off with the assumptions. None of those things that you spout is true. If you really want to learn about the economy in an unbiased way, then first you have to assume that everyone is wrong. You look at everything with a clean slate. The left and the right on propaganda grounds are both wrong and an embarrassment to the field. Now that we have decided to ignore all propaganda. We can start to evaluate what the real causes of what is going on and focus on the issues on a BY ISSUE basis. Rule 1) about the economy. Sledgehammer approaches to financial markets never work cleanly. We are supposed to be deadly surgical. 2) What all the political pundits are passing gas on Detriot about is UNTRUE. The causes of Detriots demise is NOT because so much of major political factors, but because the city has been historically declining. Detroit's rise is largely because of the building of the Eerie Canal and the factor that the great lakes played back in the day as a major hub of trade. (next post)

To reply to this comment, follow the link below:
http://www.huffingtonpost.com/social/ApolloSpeaks2U/paul-krugman_n_3634280_271302731.html
photo
grazer333   July 24, 2013 at 2:08am

But as other overland routes (such as Chicago) and new economies (west coast to east coast trade) have emerged, the importance of Detriot as a trading thorough-fare has declined steeply. The only other thing keeping it alive was the auto industry. However, the American auto-industry has been marginalized by foreign competition. Notably Japan, where the American auto industry has taken a markedly smaller and smaller portion of the overall auto market, even domestically, for decades. There is nothing politically really, that can really save Detriot as the major metropolis that it once was. It economically is now probably nothing more than a medium sized city and what we are seeing is the painful process of shifting its economic status downward. Detriot is NOT an indicator of our overall economy. It is a special case. You can't use it as an example for the overall American economy. GREECE is also a special case and CANNOT be used as an indicator of the overall European economy and their economic system (and this is where you austerity measures theory dies). What has caused Greece to get kicked in the stomach and brought to its knees is its borrowing with GERMAN BANKS. This was at a time when Greece was being heavily invested in as a thorough-fare of economic markets going into the middle east. Its crash is because expectation in Greek investment didn't meet with expected historical trends and its borrowing from German banks outpaced its ability to pay back. Its social programs ARE

To reply to this comment, follow the link below:
http://www.huffingtonpost.com/social/ApolloSpeaks2U/paul-krugman_n_3634280_271302731.html
My reply 
 
In the 1990s drastic, necessary austerity measures worked wonders for the Swedish economy (cutting taxes, spending, regulations, and privatization) saving it from the fate of bankrupt, broken socialist Greece which simply ran out of other people's money and spent beyond its means in trying to create an impossible egalitarian paradise for its people. During the early 1920s Harding and Coolidge slashed taxes, spending and regulations unleashing the roaring, soaring, butt kicking twenties ending the Wilson post-war depression, bringing unemployment down from 12% to 1.5% in six years-unmatched until World War II when the US economy was militarized. 
 
As for Keynes I defy you to give me one example during peacetime of a gov't, any gov't, spending its way out of economic distress and back to prosperity. Neither Hoover nor FDR could do it. Neither Ford, Bush nor Obama could do it. The Japanese with a debt of 220% of GDP have been at it for 22 years and can't do it.
 
Face the facts, Mr. Economist: Keynesianism is a failed economic theory; and with good reason Stockman predicted the Death of the Keynesian State-as it is happening before our very eyes worldwide.
 
 And yet another non-answer.
  
photo
grazer333   July 25, 2013 at 12:05am

You said: "In the 1990s drastic, necessary austerity measures worked wonders for the Swedish economy (cutting taxes, spending, regulations, and privatization)" Nope. Don't know where you got that information from, but you are incorrect. Austerity measures weren't what worked measures. They are more "socialist" than they were then. What they have done is increased their economic influence in then world market. Once again, I must remind you that we economists (real economist) have destroyed the austerity measure theory. It was a "study" commissioned by banks to get a "theory" out there that would back austerity measures. It made it through Harvard thanks to academic fraud and anyone associated with that study is now a source of shame and ridicule in real academic circles. "Socialist Greece" is another great example of you being flat out wrong. "Overspending" is not what caused their problem there. It was failed investements to capture the market thoroughfare through the middle east and eastern Europe, but other regions (such as the middle east themselves) beat them to it. Most of their problems came through PRIVATE TO PRIVATE ENTERPRISE LOANS from Germany and was not a reflection of their so called "socialist state." You know, if you want to continue to spread misconceptions about real economics, you can always try to be a political pundit or something. (next post)

 

NOT the cause of its problems. The majority of its borrowing was to enhance its abilities to deal with the expected extra trading activities that were expected to go through Greece as economies in the Middle East and in Eastern Europe were expected to develop faster. What killed Greece was the fact that the Middle East itself started investing in becoming the next great trading hub (such as in Dubai, Qutar, etc.) and Germany and Scandinavia moved in to take on the trading activities going into Eastern Europe. All of this knocked down Greece. Not lack of Austerity. DAVID STOCKMAN has long since been disproven by real economists in real economic academic circles. He was commissioned by the banks to create a study that supported austerity measures so that the big banks could get their capital back faster so that they could REINVEST in their own debt and essentially create a bubble out of it! David Stockman has committed ACADEMIC FRAUD and is considered a bad name to be associated with at all reputable universities. The Austerity theories that you espouse have ALL been disproven. I have personally worked with academic teams that have destroyed these theories. It is possible that there will be criminal cases being filed against some of these "professors" for fraud coming up.
 
My reply
  
I appreciate the lengthy dissertation. But you didn't answer my simple question: How can a society with a growing public sector and entitlement state where a majority of citizens are taking more from gov't than are paying in taxes avoid going bankrupt? What's your solution to keeping society prosperous and gov't benefits going and growing when the public sector is growing faster than the private sector and the tax base is shrinking-as happened in Greece and Detroit?
 
The last non-answer
 
photo
grazer333   July 24, 2013 at 11:51pm

You said: "How can a society with a growing public sector and entitlement state where a majority of citizens are taking more from gov't than they're paying in taxes avoid going bankrupt?" This is an assumption and NOT the facts. So to answer your question, there is nothing to answer here as economists have NOT recognized our state as a "growing entitlement state." My "dissertation" also clearly shows what is happening and why in Greece. The private sector did not shrink in Greece, the debt increased because Greece was trying to INCREASE the private sector, but failed because the Middle East beat them to it in their market shares. So all of your assumptions are wrong. The private sector IS NOT shrinking. It is the opposite. Once again, I will tell you, if you want to understand economics. look at yourself and immediately assume that everything that you think, is wrong. From there, rebuild how you understand economics through reputable sources, not propaganda. (next post)

To reply to this comment, follow the link below:
http://www.huffingtonpost.com/social/ApolloSpeaks2U/paul-krugman_n_3634280_271579912.html
 
 
photo
grazer333   July 24, 2013 at 11:57pm

Now if you take my last post seriously, you will no longer go into this realm with preconceived notions. Now to the facts: Welfare per capita of population has SHRUNK in the last 6 years. So there is not an increase of individual entitlements. There is actually an increase in entitlements, yet, but it has to do with THE MILITARY and with companies getting entitlements from the government. There is your first source of problems. Cut corporate welfare and our military budget (54% of our annual budget!) and we will have tons of extra money to pay off our debt. You don't think that is big? Well generally only 2nd and 3rd world countries have spent more than 50% of their annual budgets on their military during times of peace. Our tax base is NOT shrinking. In fact, it has been growing. What has been shrinking is tax collection and the number of people that have legally exempted themselves from taxes. But we know from history that we could tax upwards to 50% or more on the corporate rate and we would get most of those taxes if we enforced the laws! Those that complain about taxes and "threaten" to move usually can't because it is more expensive to do it in a country that actually enforces its tax laws. They just want you to believe that they can.

 
We still have plenty in society to be prosperous. The economic numbers show this. What has cost us our prosperity is our lack of courage of enforcing our own laws against big business.
 
 
 

 

My reply 
 
If only nations were angels they wouldn't need weapons and armies. But in the real, dangerous, predatory world driven by greed for power and wealth (a world that respects force and strength and despises the weak) a global superpower needs a global military presence to protect it's worldwide interests and some measure of order and stability in the world. Not doing so would create a power vacuum filled by worse nations like Russia or China that would greatly damage us economically with declining exports and wealth-who would protect our sea lanes, the UN?
 
As Obama said to ABC's Charley Gibson in Dec. 2009: it's our "healthcare/Medicare costs [not military spending] that's driving us to national bankruptcy." And he was right (though disingenuous).
 
You are dead wrong about welfare growth. Since Fiscal Year 2009 federal and state welfare spending has increased by more than 18.8% approaching $1 trillion from $779.9 billion.
 
With a president who opposed Clinton's Welfare Reform Act wanting more people on the dole is it any wonder this is happening? Moreover, the entire range of non-welfare government benefits (Medicare, Social Security, fat insane gov't pensions, unemployment insurance, etc) is growing exponentially and driving us to ruin with trillions in unfunded liabilities.
 
That being said, keep one simple fact in mind: government can't run without revenue; revenue is provided by taxpayers; taxpayers are created in the private sector by corporations and business owners. For promoting the welfare and well-being of society the private sector (corporate America which leftists like you, Krugman and Obama insanely loath) is far and away more important than the public sector, which it depends on for its existence. Anything that hurts the private sector (higher taxes, more regulations, fear, uncertainty etc.) hurts workers who are consumers that buy goods and services and pay taxes to local, state and the federal gov'ts. Crazy, crackpot, FRAUDULANT economists like you and Krugman are hell-bent on punishing wealth and hurting business (the job creators) for some screwy, unrealistic, ideological notion of equality, fairness and the greater good (of which you are clueless).
 
THE FINAL BLOW
 
You laughably wrote: "Austerity measures weren't what worked in Sweden [in the 90s to fix the economy)...... Sweden is more "socialist" today then they were then." Either you're a politically correct ideological liar (lying for the fantasy of social justice nirvana) like you're idol: lying, crackpot economic fake Paul Krugman; or you're an ignoramus with a degree in economics-plenty of those around. What duly "accredited economist" other than a pin head or FRAUD would deny the reality that austerity economics saved Sweden from financial and economic ruin in the 90s?
 
Drawing on his country's experience with austerity economics Sweden's Financial Minister Anders Borg urged the EU last April "to confront its fiscal problems by accepting more financial austerity to stabilize the economy for the long haul." 
 
In the 1990s Sweden applied such radically unsocialist austerity measures such as cutting taxes, spending, regulations and public sector jobs; slashing pension and unemployment benefits, and hiking union membership fees. Moreover, your notion that Sweden is more "socialist" today than in the past is equally false disproven by the privatization of most if not all of its publicly owned companies and industries: electricity, transportation, telecommunications, the postal service, etc.
 
Moreover, Sweden today has an unsocialist voucher system for school choice (stupidly abolished by Obama in DC); has a booming private healthcare sector as an alternative to a very inefficient public system (the British and Canadians also have this); and in "socialist" Sweden there is no legal minimum wage (this should be abolished in the US). Even Sweden's pension system has been de-socialized: pensions grow or shrink with the performance of the economy. In short, the Sweden in your head is the failed, self-destructive Sweden that died in the 1990s never to return.
 
 One week later no answer.
 
The debate continues with a second Krugmanite named secular 666 who challenges my understanding of Socialism and Keynes. I will post this tomorrow.
 
AUSTERITY TEA PARTY ECONOMICS IS THE FUTURE!
 
POSTSCRIPT
(posted 10-15-2015)
 

What happened to Sweden was NOT due to Socialism at all, but in reality bears a far stronger resemblance to how the GOP crippled our economy before Obama took office:

"In the 1980s, a real estate and financial bubble formed, driven by a rapid increase in lending. A restructuring of the tax system, in order to emphasize low inflation combined with an international economic slowdown in the early 1990s, caused the bubble to burst. Between 1990 and 1993 GDP went down by 5% and unemployment skyrocketed, causing the worst economic crisis in Sweden since the 1930s. According to an analysis by George Berglund published in Computer Sweden in 1992, the investment level decreased drastically for information technology and computing equipment, except in the financial and banking sector, the part of the industry that created the crisis. The investment levels for IT and computers were restored as early as 1993. In 1992 there was a run on the currency, the central bank briefly jacking up interest to 500% in an unsuccessful effort to defend the currency's fixed exchange rate. Total employment fell by almost 10% during the crisis."

By the way, thanks for the link to the comedy website.

 

  •  ApolloSpeaks  Half-Evil D 
  • Why did Sweden's socialist government in the 1980s 
    reform/deregulate the banking sector/credit markets? Why were banks and lending institutions given more freedom to determine their lending practices? What was the socialist gov't trying to accomplish by allowing this?

    What was the reason for Bill Clinton's National Homeownership 
    Strategy-his Public/Private (Wall Street) Partnership on affordable housing for low income Americans? What was he trying to accomplish? And how did he go about doing it?

     

  • 24 hours later no answer.

  •    
 
RELATED
 
 
FORWARD EMAILS TO

 

28 thoughts on “DEBATE WITH AN “ACCREDITED (KRUGMANITE) ECONOMIST” ON “SOCIALIST” SWEDEN AND AUSTERITY ECONOMICS

  1. “Austerity never works….except when it does.” Well said. Good debate. Spending our way back to prosperity is an economic dead end.

  2. what the freak does ‘austerity’ mean or imply here…? does it mean that people cant borrow unlimited funds, buy everything they could never buy with credit…? oh i get.it..live within their means. we cant do that. we can never go back to that. NEVER!

  3. With all the lying leftist propaganda against austerity this post was very refreshing and enlightening to read.

  4. What would a person hate the most:

    1. root canals w/o anesthesia;

    2. being trapped in a 6×6 room with a life insurance salesman for 2 hours (w/o anesthesia);

    3. a fork lift running over your foot (w/o anesthesia); or,

    4. austerity w/o anesthesia ?

  5. Neither austerity nor spending is needed. What we need is liberty and free markets, with prices signalling whether we spend too much or too little.

  6. Neo-Keyensian Krugmanism means solving the problem caused by overspending by overspending more and more and more. Until we reach the promised land of equal prosperity for all it means we aren’t spending enough.

  7. I had no idea, none whatsoever, that the Swedes saved their economy with austerity economics. What does Krugman have to say about this? Why isn’t it better known?

  8. Sweden offers universal health care, guarantees paid parental leave for up to 14 months for both parents, and has a variety of welfare subsidies such as child and housing allowance. Sweden has no minimum wage largely because unions are powerful enough to collectively negotiate for their respective industries to set a wage. Its rather telling that Sweden’s conservative party calls itself the “Moderate” party and that its leader marched in Stockholm’s gay pride parade.

    1. And what would Sweden be like today if it hadn’t launched a crash austerity program to save it from socialistic ruin?

      1. That’s not my point. The point is that even with Sweden’s neoliberal turn in economic policy, in most respects its welfare state is far more generous than ours.

        1. Where would Sweden be if it weren’t for the US military? Behind the Iron Curtain. And who will protect them from Putin? Considering the necessarily large size of our military we are amazingly generous for a nation of 320 million people vs Sweden’s 9 mil.

          1. You are changing the argument now. So do you agree then that in most respects Sweden’s welfare state is far more generous than ours? I support having a strong military-but I think we can and should have a more robust welfare state too.

  9. You are right health care costs in the US are a disproportionately high in terms of percentage of GDP compared to virtually any other advanced country but it also so happens that we are the only advanced country without a real universal health care system with either single payer or otherwise using governmental negotiating power to drive down prices. Also you preclude yourself from being taken seriously when you imply that Krugman or Obama are somehow “anti private sector”.

    1. With the experiment in single payer universal health care unable to get off the ground in tiny Vermont (due to the enormous cost to taxpayers) it would be insane to nationalize it for 320 million people-unless they are willing to pay the staggeringly high price tag.

      1. I personally support the German system of multi-payer healthcare. And the evidence is clear-as percentage of GDP every country with single-payer spends less on health care than the US does.

        1. Then again much of our costs are due to lifestyle: bad diets, poor excercise, overindulgence in pleasures causing sickness and disease. Vermont’s governor sold single payer on the promise it would save Vermontians $500 million per year. Then for it to work $1.2 billion in new taxes were needed; then $1.7 billion. Last I heard the cost exceeded $2 billion. Vermont has virtually killed any chance of single payer going national.

          1. It isn’t as if many Europeans are that much healthier than us-many of them eat fairly poor diets and they smoke much more than us.

  10. Just what you Yanks need, universal health care with all the rationing, scarcity and enormously large queuing lines. In 1948 when NHS was implemented we had 450,000 hospital beds. Today we’re down to around 150,000 with waiting lines miles long. That wasn’t what we were promised in 48. Whhat we got then were Obama-like lies about health care heaven.

  11. Most Brits are satisfied with NHS (obviously they want more funding)-which is why even the Tories and UKIP aren’t calling for abolishing it.

Leave a Reply

Your email address will not be published. Required fields are marked *