[Link]

The IMF discussion paper that pretty much says that the Keynesian method of investment to close the debt to GDP ratio could be better for most economies than austerity.

Somewhat lost in this debate is the possibility of simply living with (relatively) high debt, and allowing debt ratios to decline organically through output growth.

From an IMF discussion paper, cited in the article from my earlier link.

What's the difference?

You don't get p**s taking do you?

Was shouted down for posting the above 2 years ago...

[Link]

Edited by nickgusset (10 Jun 2015 7.16pm)

Re Kensington & Chelsea ,superficial impressions can sometimes be deceptive..

"RBKC is London in microcosm. It has the second highest average income in London, of £36,000. However, this prosperity is not shared equally, and the borough also contains above average levels of deprivation. This deprivation is almost exclusively concentrated in the north of the borough, with the five northerly boroughs of Norland, Colville, St. Charles Notting Barns and Golbourne each including at least one 'Lower Super Output Area' in the 20% most deprived in the country. Golbourne is the 8th most deprived ward in London, out of 627. Earl’s Court, Redcliffe and Cremome also include areas of disadvantage."

londonspovertyprofile.org.uk

Edited by legaleagle (10 Jun 2015 10.46pm)

I'm not defending bankers.

I was responding to yet another classic Gusset oversimplification.

You said:

"Not so in Iceland. Rather than bailing the banks out, they arrested those responsible. Iceland invested in infrastructure and now happen to be doing rather well. No austerity there."

You're implying that if Britain followed Iceland's approach, we'd solve our deficit problem.

1. You make a comparison between Iceland (300 thousand people) and the UK (ca. 70m people). It is not a useful comparison.

2. The Icelandic government recapitalised the banks to the tune of 30% of national GDP. They increased Icelandic public debt by about 20%. How is that not a bail-out?

3. Iceland imposed capital controls. In a small economy like theirs they can get away with stuff like that. Capital controls would cripple Britain.

4. Where is your evidence that "Iceland invested in infrastructure"? What big projects does a small volcanic island with less than half a million people need? High speed rail?

5. What makes you say Iceland is "doing rather well"?

It's doing better than before but that's not difficult.

In 'the Economist' they said, "whether this strong performance will last is not clear. Household debt is still high, and the IMF worries about the effect of removing capital controls too fast. Some people also fret about a house-price bubble. Iceland is not out of the woods yet."

It seems to me you've skim-read a blog (presumably a left-wing one containing quotes from, let me guess, Joseph Stiglitz?) and copied and pasted it on here and tried to pass it off as an "argument" against austerity.

...we must expand...get more pupils...so that the knowledge will spread...