Comments on: Are the US and UK Too Spoiled to Accept Austerity? http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html Sun, 22 Nov 2009 07:56:24 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: In Debt We Trust http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47935 In Debt We Trust Wed, 27 May 2009 01:34:31 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47935 If you think about it, the cost to Japan is a lot higher than normally calculated.<br /><br />Higher opportunity costs in child production have discouraged potential parents from settling down or just having some time between the sheets for themselves. <br /><br />Instead, you had people cutting back on consumption of food, leisure, travel, and even basic staples. In such an environment, how could couples even conceive (pun intended) the idea of having childrn? If you think about it, the cost to Japan is a lot higher than normally calculated.

Higher opportunity costs in child production have discouraged potential parents from settling down or just having some time between the sheets for themselves.

Instead, you had people cutting back on consumption of food, leisure, travel, and even basic staples. In such an environment, how could couples even conceive (pun intended) the idea of having childrn?

]]> By: plschwarz http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47932 plschwarz Tue, 26 May 2009 22:41:28 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47932 Yves<br />Re you post at 1.14am.<br />I wasn't going to argue the UAW but it seems that their pension fund will get a fast 10B while much of US subsidy will be wiped out. This amounts to a rather direct payment of the 10 B from the US taxpayer to the UAW retirement fund. Other BKs wiped out Airline etc pensions.<br />The UAW has been one of the largest Congressional donors. Obviously it is paying off. The older UAW contracts were rather sweet deals between the big3 and UAW. The loser was the American consumer all these years.<br />And recently the ruling clique of older UAW workers and pensioners were in a pure demonstration of brotherly love, willing to let new hires (Ha) get paid less as long as they got theirs.<br />Can you tell us why the UAW shold get more then all the others who have and will lose their pensions. Their gov't assured pension is much smaller then UAW. I think you have misplaced empathy. Yves
Re you post at 1.14am.
I wasn’t going to argue the UAW but it seems that their pension fund will get a fast 10B while much of US subsidy will be wiped out. This amounts to a rather direct payment of the 10 B from the US taxpayer to the UAW retirement fund. Other BKs wiped out Airline etc pensions.
The UAW has been one of the largest Congressional donors. Obviously it is paying off. The older UAW contracts were rather sweet deals between the big3 and UAW. The loser was the American consumer all these years.
And recently the ruling clique of older UAW workers and pensioners were in a pure demonstration of brotherly love, willing to let new hires (Ha) get paid less as long as they got theirs.
Can you tell us why the UAW shold get more then all the others who have and will lose their pensions. Their gov’t assured pension is much smaller then UAW. I think you have misplaced empathy.

]]> By: VG Chicago http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47931 VG Chicago Tue, 26 May 2009 22:30:19 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47931 <b>Long periods of economic expansion mean that citizens in the US and the UK have developed a sense of entitlement...</b>You must be referring to the fat cat "citizens" that work on Wall Street and live on Park Ave. Because tens of millions of Americans have been going without health insurance and have been putting up with declining wages for decades now. America has been under austerity for a long time now.<br /><br />So, I'm not worried about the average American, because we are a sturdy bunch, a nation of immigrants, able and willing to live a Spartan life, and to work our way out of this hole. I'm more concerned about the fat cats, who may not find the nation they have been plundering for over a century to be so friendly to them anymore.<br /><br />I'm also more concerned about the lazy and parasitical fat (and slim) cats in Western Europe, who have gotten used to living on American handouts and tourism. Nations like Spain, France, Italy, and of course, Britain, have a lot more belt tightening ahead than the US does. Say bye-bye to the 4000 euro per month pentsion for lazy and uneducated Spaniards retiring at 59 after working for 20 years renting boats by the beach to German tourists. Same goes for much of the rest of Europe.<br /><br />As far as Eastern Europe, they'll be fine. It was their blood and tears that kept the Western European parasytes well fed for 50 years. Eastern Europeans will likely rise like China has. Eastern Europe has far more virtue to be admired than any nation in the West (but better not ask a Frenchman to admit that, or you'll get a lengthy and boring monologue about how great Victor Hugo was... 200 years ago...LOL).<br /><br />Vinny GOLDberg Long periods of economic expansion mean that citizens in the US and the UK have developed a sense of entitlement…You must be referring to the fat cat “citizens” that work on Wall Street and live on Park Ave. Because tens of millions of Americans have been going without health insurance and have been putting up with declining wages for decades now. America has been under austerity for a long time now.

So, I’m not worried about the average American, because we are a sturdy bunch, a nation of immigrants, able and willing to live a Spartan life, and to work our way out of this hole. I’m more concerned about the fat cats, who may not find the nation they have been plundering for over a century to be so friendly to them anymore.

I’m also more concerned about the lazy and parasitical fat (and slim) cats in Western Europe, who have gotten used to living on American handouts and tourism. Nations like Spain, France, Italy, and of course, Britain, have a lot more belt tightening ahead than the US does. Say bye-bye to the 4000 euro per month pentsion for lazy and uneducated Spaniards retiring at 59 after working for 20 years renting boats by the beach to German tourists. Same goes for much of the rest of Europe.

As far as Eastern Europe, they’ll be fine. It was their blood and tears that kept the Western European parasytes well fed for 50 years. Eastern Europeans will likely rise like China has. Eastern Europe has far more virtue to be admired than any nation in the West (but better not ask a Frenchman to admit that, or you’ll get a lengthy and boring monologue about how great Victor Hugo was… 200 years ago…LOL).

Vinny GOLDberg

]]> By: juan http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47928 juan Tue, 26 May 2009 21:51:00 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47928 oops<br /><br />should say:<br /><br />taking purchasing power to be one function of consumer credit. oops

should say:

taking purchasing power to be one function of consumer credit.

]]> By: juan http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47927 juan Tue, 26 May 2009 21:46:37 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47927 standard of living - combination of:<br /><br />today's necessaries being yesterday's luxuries<br /><br />and today's luxuries being yesterday's necessaries.<br /><br />not precisely quantifiable but more to do with what a 19th century guy called 'the moral-historical', i.e. incorporation of ability to realize new needs into reproduction cost of labor on one hand and loss of this ability on the other, so related to relative power of opposing classes and overall economic conditions.<br /><br />in modern times also the shifting relation between purchasing power and affordability , taking 'affordability' to be one function of consumer credit. standard of living – combination of:

today’s necessaries being yesterday’s luxuries

and today’s luxuries being yesterday’s necessaries.

not precisely quantifiable but more to do with what a 19th century guy called ‘the moral-historical’, i.e. incorporation of ability to realize new needs into reproduction cost of labor on one hand and loss of this ability on the other, so related to relative power of opposing classes and overall economic conditions.

in modern times also the shifting relation between purchasing power and affordability , taking ‘affordability’ to be one function of consumer credit.

]]> By: Yves Smith http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47926 Yves Smith Tue, 26 May 2009 19:53:08 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47926 Sanjay,<br /><br />With all due respect, if anything, you have it backwards. Within a country, the lenders and borrowers are different people. If money was lent for bad uses, it is a loss of wealth to the lender. The borrower also gets hurt in cases where he has skin in the game too (as in equity in a house or company that gets wiped out). The lost two decades in Japan illustrates how massive loss of wealth leads to low consumption as lenders try to rebulid their balance sheets (individuals as well as banks), and a substantial relative fall in standards of living. <br /><br />If debt is external, you can in theory stiff your creditors with no internal consequences. The UK and France defaulted on their war loans in the Great Depression and suffered much less than the creditors. But we cannot so neatly parse out external and internal creditors. If the US were to partially default on government debt, we'd hurt investors in the US and given the dollars' status, probably precipitate a bigger problem. The only partial default I can see us pulling off might be welching on some guarantees or, of course, inflation. Sanjay,

With all due respect, if anything, you have it backwards. Within a country, the lenders and borrowers are different people. If money was lent for bad uses, it is a loss of wealth to the lender. The borrower also gets hurt in cases where he has skin in the game too (as in equity in a house or company that gets wiped out). The lost two decades in Japan illustrates how massive loss of wealth leads to low consumption as lenders try to rebulid their balance sheets (individuals as well as banks), and a substantial relative fall in standards of living.

If debt is external, you can in theory stiff your creditors with no internal consequences. The UK and France defaulted on their war loans in the Great Depression and suffered much less than the creditors. But we cannot so neatly parse out external and internal creditors. If the US were to partially default on government debt, we’d hurt investors in the US and given the dollars’ status, probably precipitate a bigger problem. The only partial default I can see us pulling off might be welching on some guarantees or, of course, inflation.

]]> By: Tortoise http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47925 Tortoise Tue, 26 May 2009 17:34:53 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47925 Sanjay is concerned that the US federal the debt is owed to foreigners. Not to worry. Only about 29% is owed to foreigners. <br /><br />See <br /><br />http://www.optimist123.com/optimist/2009/04/pie-chart-who-owns-the-national-debt.html Sanjay is concerned that the US federal the debt is owed to foreigners. Not to worry. Only about 29% is owed to foreigners.

See

http://www.optimist123.com/optimist/2009/04/pie-chart-who-owns-the-national-debt.html

]]> By: Mark http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47921 Mark Tue, 26 May 2009 14:11:04 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47921 Will Obama tax the rich to pay off the stimulus borrowings? If not, then austerity or inflation are his remaining choices... Will Obama tax the rich to pay off the stimulus borrowings? If not, then austerity or inflation are his remaining choices…

]]> By: sanjay http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47920 sanjay Tue, 26 May 2009 13:27:41 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47920 It strikes me as strange that those who talk about high levels of debt to GDP (e.g. Krugman and you) miss a couple of points.<br /><br />If the the debt is owed to yourself as in the case of Japan it is a very different situation than if the debt is owed to foreigners.(as in the case of the US).<br /><br />Secondly, absolute GDP matters as much as a percentage. Thus is it is one thing for a country like Belgium or Italy to run debt to GDP of 100% plus that is a tiny fraction of global GDP and global savings- it is another thing all together when the behmoth runs a debt to GDP of 100% plus. It strikes me as strange that those who talk about high levels of debt to GDP (e.g. Krugman and you) miss a couple of points.

If the the debt is owed to yourself as in the case of Japan it is a very different situation than if the debt is owed to foreigners.(as in the case of the US).

Secondly, absolute GDP matters as much as a percentage. Thus is it is one thing for a country like Belgium or Italy to run debt to GDP of 100% plus that is a tiny fraction of global GDP and global savings- it is another thing all together when the behmoth runs a debt to GDP of 100% plus.

]]> By: Ben Ross http://www.nakedcapitalism.com/2009/05/are-us-and-uk-too-spoiled-to-accept.html#comment-47917 Ben Ross Tue, 26 May 2009 12:26:43 +0000 http://www.nakedcapitalism.com/2009/05/are-the-us-and-uk-too-spoiled-to-accept-austerity/#comment-47917 <i>The fundamental cause of the current crisis is that consumption has been unsustainably high</i>Isn't the fundamental cause that consumption, in China, has been unsustainably low? As commenters point out, the median income in the US has not grown since the 1970s. The fundamental cause of the current crisis is that consumption has been unsustainably highIsn’t the fundamental cause that consumption, in China, has been unsustainably low? As commenters point out, the median income in the US has not grown since the 1970s.

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