Fascinating

Expansionary austerity does exist and work then?

Fiscal consolidation is austerity. Currency depreciation is expansionary. Get the second larger than the first, the net is expansionary.

What did Osborne try? Fiscal contraction plus currency depreciation…..

7 thoughts on “Fascinating”

  1. Kruggy changes his tune even faster than Capt Potato. And he has a Nobel. Just shows what a load of wank economics is as an academic discipline

  2. If macroeconomics was too difficult for such a clever chap as Maynard Keynes then it’s bound to be too difficult for the likes of Krugman.

  3. Used to work with a couple of Argentinians, remember them being very unhappy when the state nationalised (or more accurately stole) the pension funds, a shining model for Murphy and his green investment fund no doubt

  4. «Fiscal consolidation is austerity.»

    That’s the new redefinition by “leftoids” like Krugman of “austerity”: the proper definition from the “stop and go days” is that austerity is when fiscal and credit (“monetary”) policies become tighter, in order to explicitly reduce incomes and consumption, in order to reduce imports (mainly of oil).

    I am astonished that this post is written as if credit (“monetary”) policy did not exist, and yet G Osbone is reported having said:

    “A credible fiscal plan allows you to have a looser monetary policy than would otherwise be the case. My approach is to be fiscally conservative but monetarily active.”
    Hopefully we will get a little housing boom and everyone will be happy as property values go up

    «Currency depreciation is expansionary.»

    Only if it significantly reduces imports or increases sales abroad. In the presence of a massively expansionary credit policy at home imports won’t shrink, and in the absence of great sales opportunities abroad exports won’t budge. The result has not been that awesome:

    https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/hbop/pnbp

    https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/aa6h/ukea

    «Get the second larger than the first, the net is expansionary. What did Osborne try? Fiscal contraction plus currency depreciation….»

    Actually Osborne tried mostly a fiscal tightening and a massive credit loosening (a small currency depreciation also happened). That’s not austerity, that’s big time government created redistribution from producers to rentiers. Indeed most workers and businesses have seen modest increases or losses, and most rentiers have been massive capital gains and vast increases in rents, entirely redistributed from non-rentiers (or smaller rentiers).

  5. @Blissex September 5, 2019 at 10:15 pm

    You omitted the key point in your rant:

    G Osbone [sic] merely continued what G Brown implemented; the “rentiers big profits” occurred while Brown was PM.

    No surprise there, BBC/C4 & MSM report as if 1997-2010 did not exist. Will Johnson be blamed for Blair & EU’s Grenfell? Maybe some Blair “Caged Kids” photos too.

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