There’s austerity in Europe, all right — of the taxing sort

The austerity debate is back, with American liberals pointing to shrinking European economies as evidence against the wisdom of cutting government spending here.

Typical is this argument from a column by the New York Times’ Paul Krugman last month: “Europe has had several years of experience with harsh austerity programs, and the results are exactly what students of history told you would happen: such programs push depressed economies even deeper into depression.”

Indeed, nine of the European Union’s 27 member-countries were in technical recession by the end of 2011 or the first quarter of 2012 (not all countries report first-quarter data at the same time).

There’s just one problem: There have been no such austerity programs, at least not of the type Krugman and other liberals warn against.

In five of the nine recessionary countries, governments cut spending in 2011. In four, they didn’t. There were another three European countries in which public spending fell without triggering a recession.

Britain, considered a poster child for the hazards of austerity, hasn’t cut spending at all. It did, however, raise the top marginal tax rate: by 10 percentage points in 2010 and an additional 1 point last year.

In fact, the EU’s recessionary countries were just as likely to have raised taxes in 2011 as to have cut spending.

The hardest-hit countries — Greece, Portugal and Spain — did both. These countries are the only ones in Europe that can truthfully say they’ve embraced austerity. Unless, that is, you count Iceland, which returned to robust growth last year despite cutting spending by more than 5 percent.

Yet, in both Portugal and Spain, the tax hikes were larger, percentage-wise, than the spending cuts. So, who’s to say the changes in spending, rather than taxes, are to blame?

What about Ireland, you may ask. Hasn’t the famed “Celtic Tiger” of the 1990s and early 2000s been declawed during the past few years?

Ireland has dipped into recession, and it did cut spending by a whopping 27 percent last year. Of course, it increased spending by an even more whopping 33 percent in 2010 — leaving public expenditures just slightly below the levels in the previous couple of years.

What has changed significantly in Ireland are tax rates. Spending was 1 percent lower in 2011 than in 2008, but the top marginal tax rate — the rate applied to an earner’s next euro of income — rose 17 percent. Again, why should we accept it’s the spending, not the taxing, that has pushed Ireland’s economy down?

One more thing you won’t hear from the anti-austerity crowd is that the tax hikes have not had their intended effects. Britain, for instance, is lowering its top tax rate again after no more than two-fifths of the projected new revenues materialized. All that the higher rate achieved, treasury chief George Osborne noted, was for high-earning Britons to move their money around and change their behavior to avoid the higher rates.

These distortions — which themselves could explain some of the U.K. economy’s troubles — weren’t worth the new revenues that were realized, Osborne explained.

That’s one more thing for Americans to keep in mind as they hear about the policies we should or shouldn’t import from Europe.

– By Kyle Wingfield

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561 comments Add your comment

DannyX

May 7th, 2012
2:01 pm

““Austerity” takes a shellacking, and European stock markets plunge.”

Wrong again Barry!!!!

[...] summary excludes Ireland, but as Kyle Wingfield notes, the top marginal tax rate there rose 17 percent amid a global recession. In contrast, [...]

Lil' Barry Bailout (Revised Downward)

May 7th, 2012
2:20 pm

Gas prices are double what they were after our President Bush’s hard work lowering them.

The price drops from $4 to $3.75 and receptacles rejoice, just like they do when they get 25% off jewelry at Zales.

Obozo receptacles: Easily led suckers.

Jefferson

May 7th, 2012
2:52 pm

Taxes will be going up in 2013, can’t say you were not told.

Rafe Hollister

May 7th, 2012
3:01 pm

Joe the Prophet

Austerity was never tried in France, they were too addicted to the dole. Sarkozy tried to raise the retirement age from 62 to 65, and the proletarians marched in the streets. He backed off, to no avail, as they never let him forget his efforts. Addicted folks are hard to treat. A little pain sends them to marching.

Socialism is predictable, it will always fail, as the rich go into hiding or leave and the moochers wind up trying to get by on what little they contribute and what they can borrow or steal from their neighbors. System will eventually come crashing down as it always does.

Jeff G

May 7th, 2012
3:28 pm

@Michael H. Smith 9:01
See if I got this straight. All ten planks of the Communist Manifesto have been implemented in the U.S.–most of them by the 1930’s according to your own manifesto. And yet, the period of 1945 until the present saw the United States achieve it’s greatest level of prosperity as well as global dominance in the economic, cultural, and military sense. All the while, the U.S. spent enormous amounts of time, talent, and treasure in a successful effort to defeat communism worldwide.
What exactly are you advocating? A return to the good old days of the 19th century?
p.s. I’m amazed that so many hard-working capitalists like you, Lil Barry Bailout, and others have so much time to follow the comments and reply every twenty minutes or so. Being part of the downtrodden minority of hard-working Americans who have to support the rest of us slackers, I’m surprised there’s time for your constant online discourse. Keep up the hard work!

Tiberius - Banned from Bookman's and proud of it!

May 7th, 2012
3:29 pm

“You’re confident of showing up here smiling on Nov 7.
Aren’t you?”

No, I’m not confident at all, as I have been writing about for months. What’s your point?

Tiberius - Banned from Bookman's and proud of it!

May 7th, 2012
3:31 pm

What part of “creeping Socialism” do you NOT get, Jeff G.?

The 1930’s were merely the first foot in the door.

St Simons - we're on Island time

May 7th, 2012
3:35 pm

“No one ever cut their way to Prosperiteh”

-the real Ronald Reagan, not the cartoon character on the AM radio

Tiberius - Banned from Bookman's and proud of it!

May 7th, 2012
3:42 pm

No one ever deficit spent their way to prosperity, either, St. Simons. If you think we’re ever going to see real prosperity in our lifetimes with our debt now exceeding our GDP, think again.

Just saying..

May 7th, 2012
3:44 pm

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin…
May 7th, 2012
1:38 pm: Hang that savage upside down by his feet, see if he keeps up with the giggling.

That works. Right up until the moment that an American is captured. And it’s your son.

"It it quacks like a duck.........."

May 7th, 2012
3:45 pm

“Socialism is predictable, it will always fail….

Socialism is failing in Norway, Denmark, Switzerland, Sweden, etc. etc. ? Australia, New Zealand have socialist components as well. So does Canada and many other countries

It could be failing all over, but if you could help me I would be thankful indeed.

I guess first off we would need to start with how we are defining socialism and to what degree is it entrenched into any given countries government / policies. The US has had socialist components for many years

Just saying..

May 7th, 2012
3:48 pm

Tiberius – Banned from Bookman’s and proud of it!
May 7th, 2012
3:29 pm: “You’re confident of showing up here smiling on Nov 7.
Aren’t you?”
No, I’m not confident at all, as I have been writing about for months. What’s your point?

Remember when you encouraged me yesterday to have a sense of humor?
Just turn it around.

Rafe Hollister

May 7th, 2012
4:02 pm

Duck

From Heritage.com List of most economically free. So, my friend you were wrong with your assertions. Notice USA #10, much below, Australia, New Zealand, Switzerland, etc. As you can see with Oblamers Dodd/Frank bill and other regulations we are slipping in economic freedom, creeping socialism afoot!

Top 10 Countries world rank by country

1
Hong Kong

2
Singapore

3
Australia

4
New Zealand

5
Switzerland

6
Canada

7
Chile

8
Mauritius

9
Ireland

10
United States

Tiberius - Banned from Bookman's and proud of it!

May 7th, 2012
4:09 pm

Just saying, having a sense of humor requires that you can recognize and generate something that is generally considered funny.

You ain’t got it, and neither does DannyX.

md

May 7th, 2012
4:55 pm

“Socialism is failing in Norway, Denmark, Switzerland, Sweden, etc. etc. ? Australia, New Zealand have socialist components as well. So does Canada and many other countries”

And most of those have a version of a “closed” society……socialism works better when everybody is required to participate. Try applying to any of those countries without money in the bank and an acquired job beforehand and see what they say. And some have an unofficial closed society….read up on expat experiences to each one and one will get the drift.

The EU is experiencing illegal immigration much like we are, and struggling mightily to straddle the line between accommodating and sovereignty.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

May 7th, 2012
5:05 pm

That works. Right up until the moment that an American is captured. And it’s your son.

I’m pretty sure we already passed by this milestone-

(AP) ISLAMABAD – A 70-year-old American aid worker kidnapped nine months ago in Pakistan said in a video released by al Qaeda that he will be killed unless President Barack Obama agrees to the militant group’s demands.

And no, that ain’t my son, just sayin..

Rafe Hollister

May 7th, 2012
5:26 pm

Duck
I was not that familiar with Sweden, so I did some research. You can take credit for that.

Sweden has been thrown up by the left for years as a shining example, however, they do not tell the whole story, go figure. The average annual income is less than that earned by Black Americans in the USA. Financially, the citizens are more economically free than Americans. Sweden is more pro business than Oblamer America. Socialism in Sweden is not at all what the left in America crack it up to be, again who woulda thought the left would deceive us. A link you ask, there are several stories/opinions here on Swedish socialism and the myths surrounding it.

http://mises.org/daily/955

Ernest T. Bass

May 7th, 2012
5:29 pm

No one ever deficit spent their way to prosperity, either, St. Simons.

Although Ronnie Reagan sure tried.

Ernest T. Bass

May 7th, 2012
5:32 pm

Obama inherited a disaster from the worst president in our history.

The fact that he kept the country afloat is a miracle in and of itself.

At the time Bush left Bush himself was saying that ” This sucker could go down ”

Has Obama been perfect. No.

But it sure is better than another 4 years of W.

Ernest T. Bass

May 7th, 2012
5:39 pm

http://www.realclearpolitics.com/epolls/2012/president/2012_elections_electoral_college_map.html

Good preview of what the electoral map is gonna look like come November.

All Obama needs is one or two of the toss ups and he has got it.

If he splits the tossups with Romney its an Obama landslide.

If Romney wins every single toss up he will barely win.

I like Obama’s chances.

IT AIN'T A LIE IF "YOU" BELIEVE IT

May 7th, 2012
5:40 pm

@Lil’ Barry Bailout (Revised Downward)

May 7th, 2012
2:20 pm
Gas prices are double what they were after our President Bush’s hard work lowering them.

The price drops from $4 to $3.75 and receptacles rejoice, just like they do when they get 25% off jewelry at Zales.

Obozo receptacles: Easily led suckers.

*****************************************************
History shows gas prices don’t pick presidents

In fact, George W. Bush’s administration experienced a 179.6% SPIKE in gasoline prices during two weeks of his presidency. A regular gallon of gas PEAKED at $4.11 on July 7, 2008, which was 14 cents HIGHER than the most expensive week in OBAMA’S first term.

Uh oh

May 7th, 2012
5:43 pm

Rafe

I never mentioned where the US was in terms of economic freedom or whatever. That comes from you.

You basically said “socialism” was a failure. So I asked if the countries I listed as well as others, which all have socialistic components to some degree or another were failing as well. And I also mentioned the US has socialistic components.

Without being on the same page in terms of how we are defining socialism and how it is administrated and to what degree within the various facets of the government and business in any given country, it is idiotic to say “it always fails”.

So are those countries “failing” based on your definitions?

In 2002, The Republican lead Congress (along with mane Dems) and GWB gave out the largest farm subsidy increases in history. Do you call them all “socialists” for doing so? Farm subsidies are “socialistic”, correct?

Last night I was reading some previous posta and I believe I came across someone calling you out for running with a talking point that was really a lie. Was that you? Excuse me if it was not, but I believe it was.

Ernest T. Bass

May 7th, 2012
5:44 pm

History shows gas prices don’t pick presidents

But but …. Newt ( Who it should be mentioned Kyle voted for ) said he could get it down to 2.50 a gallon.

Lil' Barry Bailout (Revised Downward)

May 7th, 2012
5:45 pm

Massachusett’s junk food ban could take bite out of school fundraisers

Bake sales, the calorie-laden standby cash-strapped classrooms, PTAs and booster clubs rely on, will be outlawed from public schools as of Aug. 1 as part of new no-nonsense nutrition standards, forcing fundraisers back to the blackboard to cook up alternative ways to raise money for kids.

http://www.bostonherald.com/news/regional/view/20220507parents_rules_half-baked_states_junk_food_ban_could_take_bite_out_of_school_fundraisers/srvc=home&position=0
————————-

Perhaps one day America can be America again. That will, of course, required that every Democrat in every political office is defeated. Thanks for the loss of freedom, Democrat maggots.

Lil' Barry Bailout (Revised Downward)

May 7th, 2012
5:49 pm

Ernest T. Bass: Obama inherited an economic recovery from the guy who preceded the worst president in our history.
——————–

Fixed.

How did Obozo blow it since our President Bush fixed the Dodd-Frank housing meltdown and bequeathed an economic recovery to your Idiot Klown?

Dusty

May 7th, 2012
6:01 pm

Well, I’m tired of this austerity program. Kyle has thinned us to a mere handful of these delicious blogs. As liberals and the Greeks & French all say, this austerity aint no fun. No! Nien! Nix!

(Don’t mind me. I’m ready to bite heads off since I drove back from North Georgia through Lake Lanier. It had to be Lake Lanier. I felt like I was driving the Titanic after it sank! That was no raincloud. That was the FLOOD!! I needed a lifeboat. Not a car! It was scary ,)

Anyway, we need some jokes here. How about the charming new underwear bombs by our dear terrorists! Bakinis or bloomers? OR…How about that joke of a new French president promising 75% tax on rich people? Have the rich Frenchies pulled out the guillotine yet? Give them hardtack or give them nothing? Come on folks. I need cheering up!!

The Audacity of Austerity

May 7th, 2012
6:02 pm

@Ernest T. Bass

May 7th, 2012
5:39 pm
http://www.realclearpolitics.com/epolls/2012/president/2012_elections_electoral_college_map.html

Good preview of what the electoral map is gonna look like come November.

All Obama needs is one or two of the toss ups and he has got it.

If he splits the tossups with Romney its an Obama landslide.

If Romney wins every single toss up he will barely win.

I like Obama’s chances.
***********************************************************************

WE GOT THIS (WOMEN, HISPANICS, AFRICAN AMERICANS)

WE GOT OBAMA’S BACK IN NOVEMBER :)

Just saying..

May 7th, 2012
6:18 pm

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin…
May 7th, 2012
5:05 pm:That works. Right up until the moment that an American is captured. And it’s your son.
I’m pretty sure we already passed by this milestone-
(AP) ISLAMABAD – A 70-year-old American aid worker kidnapped nine months ago in Pakistan said in a video released by al Qaeda that he will be killed unless President Barack Obama agrees to the militant group’s demands.
And no, that ain’t my son, just saying..

Good heavens, you are quick on the uptake.
Try reading Sen. John McCain’s (bit more cred on the topic than you) opinions on the topic, see if that illuminates anything for you.

Just saying..

May 7th, 2012
6:23 pm

Tiberius – Banned from Bookman’s and proud of it!
May 7th, 2012
4:09 pm: Just saying, having a sense of humor requires that you can recognize and generate something that is generally considered funny.
You ain’t got it, and neither does DannyX.

Thanks for the deflection, but the point went to your failure to see the grins in DannyX’s observation on posters’ hypocrisy.
Let’s see if anyone can count three before you Must have the last word. On anything. And everything.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

May 7th, 2012
6:41 pm

Just sayin- So you are concerned that we may turn an al Qaeda terrorist into a whackjob like McCain is?

Not Part of Romney's Flock

May 7th, 2012
6:43 pm

“Let’s see if anyone can count three before you Must have the last word. On anything. And everything.”

Strange thing is that he claims to be 55 yrs old……..

hahahahahaha

Rafe Hollister

May 7th, 2012
7:15 pm

UH oh
In 2002, The Republican lead Congress (along with mane Dems) and GWB gave out the largest farm subsidy increases in history. Do you call them all “socialists” for doing so? Farm subsidies are “socialistic”, correct?

Last night I was reading some previous posta and I believe I came across someone calling you out for running with a talking point that was really a lie. Was that you? Excuse me if it was not, but I believe it was.

Yep, is answer to both. Had you read further regarding para two, I apologized for falling for the BSA rumor. It fit the profile of our unmitigated disaster in chief. I stand corrected. He did something good for once. When will a lib apologize for an untruth? America waits.

Re: socialism, we have sunk into it slowly since FDR introduced the concept. The more you embrace the philosophy the quicker the failure. So, when are you going to apologize for getting it wrong on Australia, New Zealand, etc, two of the top ten countries in economic freedom. I’m sure their citizens would be aghast to learn that you consider them “socialist” countries.

Rafe Hollister

May 7th, 2012
7:20 pm

Dusty

How about this

If you think a pork chop is dangerous
but you walk around with exploding underwear

You might be a muslim.

Not Part of Romney's Flock

May 7th, 2012
7:42 pm

Rafe

I listed countries that all have “socialistic” components to some degree or another. The US does as well.

I was asking are they also failing?

I mentioned more countries than the two or three you are listing and everyone I listed has UHC…….

I’m not advocating for UHC, but that is a huge socialistic component anyway you add it up

Rafe Hollister

May 7th, 2012
8:02 pm

As I said above, the more we/they embrace socialism the quicker we/they fail. Some chose to jump all in and go quickly. Some chose to just get their feet wet, and it takes longer to kill drive, initiative, and ambition. As I said, socialism is predictable and addictive, but it always eventually fails.

America has too many problems to parse words, pick nits, redirect blame, or stand by your man. I don’t know where you stand on Oblamer, but you are parsing words and picking nits regarding socialism and who is and isn’t involved. It and its low expectations and goals for human achievement should be avoided by all.

Not Part of Romney's Flock

May 7th, 2012
8:21 pm

Rafe

I’m neither a huge Obama man or a huge follower that if we just keep lowering taxes and regs it will all be better……..

My whole point about the “socialism” being defined and how much each country has it woven within their government and society is a major component of issue whether we agree to disagree or not

This recent global recession has impacted numerous countries of all political persuasions and affiliations. We can see the France’s, Greeces’s, etc that meet your point of “failure”, however their are countries just as “socialistic” that are not in financial ruin….

Call me wishy washy or whatever, but I’m not a one size fits all individual nor is the world a one size fits all place.

I have traveled extensively in Latin America, Europe and Canada as well as making one trip each to China, Singapore and Japan. No offense but I do have some point of reference outside of some US based right / left paradigm that comes with talking points and rhetoric from both sides. I’m surely not even close to knowing everything about all governments, but attempt to learn whenever possible

We can both point to valid examples that would meet our discussion topic…….. Wouldn’t make me right and you wrong, it would go to my point that the world is not a one size fits all place.

I know you didn’t say or imply that, but that is my thoughts on the issue.

Dusty

May 7th, 2012
8:29 pm

Rafe @ 7:20

Hey not bad.. sorta catchy! Anyway, I am beginning to feel better. The Braves are playing. They haven’t warmed up yet but they will. I shall go and keep an eye on them.

The Audacity of Austerity

May 7th, 2012
8:31 pm

@Rafe Hollister

May 7th, 2012
7:20 pm
Dusty

How about this

If you think a pork chop is dangerous
but you walk around with exploding underwear

You might be a muslim.
*********************************************************************

HOW ABOUT THIS

If you like to hunt deer and wild turkey

And you ride around with a rebel flag on your truck

You might be a racist. :)

The Audacity of Austerity

May 7th, 2012
8:35 pm

@Dusty

May 7th, 2012
8:29 pm
Rafe @ 7:20

Hey not bad.. sorta catchy! Anyway, I am beginning to feel better. The Braves are playing. They haven’t warmed up yet but they will. I shall go and keep an eye on them.
****************************************************
HOW ABOUT THIS

If you walk around with a blonde mullet hairdo

and you drink mountain dew for breakfast, lunch and dinner

You might be a racist. :)

Lil' Barry Bailout (Revised Downward)

May 7th, 2012
9:14 pm

HOW ABOUT THIS

If you’re consumed by race and hate people who aren’t like you, you’re a loser.

Dusty

May 7th, 2012
9:20 pm

The Audacity of Adversity 8:31

Aren’t you the cute one? Not many bigots here. Where’d you come from?

The Audacity of Austerity

May 7th, 2012
9:55 pm

@Lil’ Barry Bailout (Revised Downward)
May 7th, 2012
9:14 pm
@Dusty

May 7th, 2012
9:20 pm
The Audacity of Adversity 8:31

Aren’t you the cute one? Not many bigots here. Where’d you come from?
*******************************************************************************************

So what Rafe said below is not being a BIGOT?

Rafe Hollister
May 7th, 2012
7:20 pm
Dusty

How about this
If you think a pork chop is dangerous
but you walk around with exploding underwear

You might be a muslim.

**********************************************

You people are a bunch of HYPOCRITES.

You talk out of the side of your mouth.

You are the reason the CONS will lose in 2012.

People are SICK and TIRED OF YOUR BLATANT HYPOCRISY.

Dusty

May 7th, 2012
10:24 pm

Audacity to Adversity 9:55

You overlook the fact that Muslim TERRORISTS want to kill as many Americans as possible. Their latest effort to kill us was to make underwear bombs. Fortunately, the CIA was able to stop that procedure before it was put in action. It was front page news today if you did not see it.

Americans do hate the actions of muslim TERRORISTS in their efforts against American civilians.. If someone here makes fun of TERRORISTS, it is because we do not like people that want to kill innocent citizens. Nor do we like blatant bigots Do you?.

The Audacity of Austerity

May 7th, 2012
10:32 pm

@Dusty

May 7th, 2012
10:24 pm
Audacity to Adversity 9:55

You overlook the fact that Muslim TERRORISTS want to kill as many Americans as possible. Their latest effort to kill us was to make underwear bombs. Fortunately, the CIA was able to stop that procedure before it was put in action. It was front page news today if you did not see it.

Americans do hate the actions of muslim TERRORISTS in their efforts against American civilians.. If someone here makes fun of TERRORISTS, it is because we do not like people that want to kill innocent citizens. Nor do we like blatant bigots Do you?.
**********************************************************

There you go again.

There is a difference between a muslim terrorist and a muslim.

ALL MUSLIMS ARE NOT TERRORISTS.

ALL BLACK PEOPLE ARE NOT ON WELFARE.

ALL GAYS ARE NOT PEDOPHILES.

ALL WHITE PEOPLE ARE NOT REDNECKS.

DO YOU GET MY DRIFT?

Are do you just want to be ignorant?

Just saying..

May 7th, 2012
10:37 pm

Not Part of Romney’s Flock
May 7th, 2012
6:43 pm: “Let’s see if anyone can count three before you Must have the last word. On anything. And everything.”

Strange thing is that he claims to be 55 yrs old……..

hahahahahaha

Now see, I Do see the humor in that…

Just saying..

May 7th, 2012
10:52 pm

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin…
May 7th, 2012
6:41 pm: Just sayin- So you are concerned that we may turn an al Qaeda terrorist into a whackjob like McCain is?

I see that you’re lordly enough to call the most recent Republican nominee for President of the US a “whack job”.

The mistake you’re making is only seeing yourself in the role of the torturer. You need to contemplate other outcomes, in an imperfect world.

The Audacity of Austerity

May 7th, 2012
10:53 pm

@Dusty

May 7th, 2012
10:24 pm
Audacity to Adversity 9:55
********************************************************
CORRECTION:

OR do you just want to be ignorant?

Your silence SPEAKS LOUD AND CLEAR.

Good Night

Dusty

May 7th, 2012
10:55 pm

Dear Adverse to Adversity

I get your drift and your ignorance. You did not mention anything that I did not know.

Muslim Americans have spoken at my church at our invitation. They deplore terrorism as much as any other citizen.

Black Americans are members of my church, Many professionals are Black as are members of the armed forces, not to mention the many superb athletes.

I do not know anyone who thinks all gays are pedophils. Sounds like you do.

Redneck is not really an insulting term. It was applied to farmers who worked in the sun all day until their necks were sunburned red. It is laughable now whether you know it or not. We can’t do without farmers.

When you stop hating people and blaming it on others, you might have a clearer vision. Right now, you seem to be making a public confession of everybody you don’t like. SADLY….. WE GET YOUR DRIFT and it is not a pretty sight.

The Audacity of Austerity

May 7th, 2012
11:19 pm

@Dusty

May 7th, 2012
10:55 pm
*************************************************

YOU are pitiful.

The OLD cliche’.

“Muslim Americans have spoken at my church at our invitation.” CHURCH? SO WHAT?

“Black Americans are members of my church,” MEMBERS? NOT FRIENDS?

You can still be a BIGOT.