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
Mike Hunt
May 5th, 2012
2:43 pm
Oblamer’s kind arent all that welcome in the BSA. They prefer leaders who are normal.
Love me some Reagan
May 5th, 2012
2:46 pm
“Did you know your hero and messiah, Barry Oblamer, is the first President to turn down the honor of being the honorary head of BSA. He doesn’t like their membership policies.”
If you don’t like the guys policies and I would agree there is much to go after but why LIE about some stupid BS………
That is what you did @ 2:31
http://www.snopes.com/politics/obama/eaglescouts.asp
hahahahahahahahahah
try again…… those right wing radio hosts and columnists dupe you daily with bs
getalife
May 5th, 2012
2:46 pm
rafe,
His name is President Obama.
Mike Hunt
May 5th, 2012
2:47 pm
getalife
May 5th, 2012
1:47 pm
He was a preacher too but never preached hate like today’s preachers.
What does Obama’s pastor have to do with anything?
getalife
May 5th, 2012
2:50 pm
mikey,
The President’s preacher is not an issue but willard’s Mormonism is an issue.
I am still looking for planet kolob and want to buy some of those magic underwear.
getalife
May 5th, 2012
2:57 pm
Krugman is right and kyle is dead wrong.
kyle will never admit it so he has zero credibility.
getalife
May 5th, 2012
3:04 pm
Google austerity failed in Europe if you want the truth.
Michael H. Smith
May 5th, 2012
3:16 pm
Yeah like getalife will never get a brain and realize the truth about NAZI Germany and Marxism in its various murdering forms.
They(the NAZI) emerged from the Leftwing, they were liberal Fascist Socialist not Rightwing Capitalist Conservatives.
No need to google, here’s the link from the search done on “The National Socialist Workers Party”.
Enjoy another one of your moments in history, COMRADES!
http://en.wikipedia.org/wiki/Nazi_Party
Michael H. Smith
May 5th, 2012
3:35 pm
Rafe, a “representative democracy” is another term floated being about to cover for implementing “Social Democracy” or a Marxist Fascist Socialist form of government.
From wikipedia:
Representative democracy involves the selection of government officials by the people being represented. If the head of state is also democratically elected then it is called a democratic republic.[55] The most common mechanisms involve election of the candidate with a majority or a plurality of the votes.
From Encyclopedia Britannica:
social democracy, political ideology that advocates a peaceful, evolutionary transition of society from capitalism to socialism using established political processes. Based on 19th-century socialism and the tenets of Karl Marx and Friedrich Engels, social democracy shares common ideological roots with communism but eschews its militancy and totalitarianism. Social democracy was originally known as revisionism because it represented a change in basic Marxist doctrine, primarily in the former’s repudiation of the use of revolution to establish a socialist society.
~
Thankfully we remain as we agree Rafe, a Representative Republic, because we do not elect by popular vote the majority of our form of government or the Head of Sate thereof: The Supreme Court is not elected by a direct popular citizen vote and our President our “Head of State” is elected by the Electoral College – not one “non-electoral delegate” individual citizen vote has ever elected or determined the election of a President of the United States of America – citing again Gore V Bush.
Dusty
May 5th, 2012
3:45 pm
What happened” Did Bookman shut down his blog? Most of his regulars are over here complaining up a storm and down grading everybody in their usual “distinctive” manner.
How nice it is to have some of Bookman’s blokes!!! Certainly gives us a fine view of catastrophic complainers. Do enjoy yourselves. We here at Kyle’s blog welcome even rejects.
Everybody has an idea. We even get a copy of one of the president’s speeches. Pretty nice one out of all the thousands he has given.
But don’t let me interfere with your jollies, dear lost liberals. I just hope you can find your way home before dark.
Love me some Reagan
May 5th, 2012
3:53 pm
“We here at Kyle’s blog welcome even rejects.”
Your buddy Tiberius being the number # 1Bookman reject
hahahahahahahahahaha
Dusty
May 5th, 2012
3:59 pm
Dear Love Reagan, 3:53
I’m not surprised Tiberius no longer posts at Bookman’s. I would be surprised if any intellectuals were left at Bookman’s. They wouldn’t fit in there.
Rafe Hollister
May 5th, 2012
4:04 pm
Love Reagan
Thanks for the link to snopes. Mea culpa. I fell for the story of the unsigned certificates. I wonder if that has ever happened in the past. I was taken in because the story seemed to fit the profile. It is like they say about stereotypes, if there was no truth at all in the stereotype, it would not work.
getalife
May 5th, 2012
4:05 pm
You mean intellectual dishonesty dusty.
It is all you got on this blog.
Rafe Hollister
May 5th, 2012
4:07 pm
getalife@2:46
So, who is Cocaine George?
getalife
May 5th, 2012
4:11 pm
“Definition of NAZI
1
: a member of a German fascist party controlling Germany from 1933 to 1945 under Adolf Hitler ”
Like the sc decision of unlimited donations and corporations are people.
cons are so far right, they are in fascists territory.
getalife
May 5th, 2012
4:12 pm
rafe,
Why do you think they call it dope?
Dusty
May 5th, 2012
4:12 pm
getalife, 4:05
The intellectual dishonesty goes up every time you post here, getalife. Obviously!
getalife
May 5th, 2012
4:14 pm
Again, the bushes used socialism to bail out their friends.
The gop are socialists.
getalife
May 5th, 2012
4:16 pm
Dusty,
What will the gop collapse if they win again?
You are a self defeatist voting for another collapse.
Plus, you have to vote for a left leaning Mormon moderate that invented ObamaCare and the mandate.
Love me some Reagan
May 5th, 2012
4:17 pm
Dusty
He was kicked off for stupidity and name calling……… Had zero to do with his intellect……
But if that makes you feel better about him and yourself………Run with it the best you can
getalife
May 5th, 2012
4:19 pm
Speaking of their hero Reagan, he would get kicked out of the tiny gop tent for not being con enough.
Dusty
May 5th, 2012
4:20 pm
That’s PRESIDENT BUSH, getalife, and he hasn’t bailed out anybody.
You must think he’s from Chicago.
getalife
May 5th, 2012
4:22 pm
Dusty.
That is a blatant lie.
He bailed out the banks using our money.
That is socialism for the wealthy.
getalife
May 5th, 2012
4:25 pm
I will stop using w when you cons start using President Obama.
Deal?
Love me some Reagan
May 5th, 2012
4:25 pm
Dusty
Nixon: Lockheed
Reagan: Chrysler
Bush: AIG…. TARP
Obama: GM, Chrysler, TARP, etc etc
You can play all the semantics with the ones you want, but they are were all “bail outs” to one degree or another
Rafe Hollister
May 5th, 2012
4:27 pm
Dusty
You know what they say about fighting with pigs, you both roll around in the mud, but the pig loves it.
Lil' Barry Bailout (Revised Downward)
May 5th, 2012
4:28 pm
The banks have paid us back.
Obozo’s $800 billion non-stimulus is long gone.
Obozo: Inferior to Bush.
getalife
May 5th, 2012
4:28 pm
Privatize profits but socialize losses .
Call it what you will.
Love me some Reagan
May 5th, 2012
4:29 pm
“I was taken in because the story seemed to fit the profile”
As long as you didn’t get taken in by “birther” and Muslim stories… you should be ok
getalife
May 5th, 2012
4:30 pm
lil bar,
The stimulus worked.
Dusty
May 5th, 2012
4:30 pm
Love some Reagan,
Know any liberals Bookman’s dumped where name-calling is as common as ants on sugar?
Nawww, I didn’t think so. It’s almost an honor to be rejected by Bookman.
getalife
May 5th, 2012
4:32 pm
Dusty,
Jay is very tolerant of the cons there.
Love me some Reagan
May 5th, 2012
4:33 pm
“The banks have paid us back.”
Almost Barry……….. Almost
http://finance.yahoo.com/blogs/daniel-gross/banks-pay-back-tarp-funds-borrowing-treasury-205658852.html
Love me some Reagan
May 5th, 2012
4:34 pm
“Nawww, I didn’t think so. It’s almost an honor to be rejected by Bookman.”
Nice spin from your ordinal……. “intellect” comment
Oreily would let you on his show because the “spin stops” there
Keep flailing…………
Love me some Reagan
May 5th, 2012
4:36 pm
Dusty
actually I do not post much on either board
Read both……….. This week would be the most ever in terms of how much I post
Rafe Hollister
May 5th, 2012
4:36 pm
You are right but they all led to where we are now. An economy propped up by an ginormous government that is impotent in improving the situation. None of these entities are too big to fail and government fools itself that it can be all things to all men. Government needs downsizing and untangling. Government has just about run out of timber to shore up this gigantic tinker toy economy.
Time to remove the whiny man-child narcissist in charge and put a serious person in the office.
getalife
May 5th, 2012
4:37 pm
It is the gop that can’t run on their record.
Our first downgrade is their only accomplishment.
Rafe Hollister
May 5th, 2012
4:38 pm
Previous comment for Love Reagan at 4:26
Dusty
May 5th, 2012
4:39 pm
Rafe,
I’m not rolling in the mud. Just sitting on the fence watching the wrestling of the Bookman boys.
By the way, that was some Braves game last night. Hinske is doing his bit ! Great game after a scary start.
getalife
May 5th, 2012
4:39 pm
rafe,
The banks control 63 % of our gdp.
Letting them fail would lose all that revenue.
The me generation could not make it in a real depression.
Love me some Reagan
May 5th, 2012
4:43 pm
Thomas Jefferson warned us about the banks……… yet both parties sold us out anyway
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
getalife
May 5th, 2012
4:43 pm
refe,
If you think willard would change anything, you are dead wrong.
Love me some Reagan
May 5th, 2012
4:44 pm
Rafe
Yes spending needs to go down
Rafe Hollister
May 5th, 2012
4:45 pm
I will stop using w when you cons start using President Obama.
I do not care what you call Dubyah. I will still refer to him as Pres Oblamer as long as he fails to take any responsibility for anything he does.
Getaclue
Have you ever noticed that the conservatives don’t get their panties in a wad over the names you call our President. We respect the office but not the man.
We don’t have chills running down our legs when our guy speaks. He is just human and not someone to idolize. They all make mistakes and are due the criticism they get, after all they volunteered for the toughest job in the world. Stand up, take responsibility, admit your mistakes, make hard choices, and above all DON”T WHINE, and you will EARN respect. No one deserves it otherwise.
@@
May 5th, 2012
4:45 pm
Angela Merkel says euro meltdown could endanger peace, a historian’s imagination runs riot…
Aside from the claim that France would overtake the U.K., it’s not outside the realm of possibilities given what’s transpired thus far.
‘Europe’s crisis is Russia’s opportunity,’ Putin announced.
Well, he hasn’t said it out loud but his recent moves indicate that’s exactly what Putin’s thinking.
Never let a good crisis go to waste. Rahm Emanuel & Vladimir Putin?
schnirt
Dusty
May 5th, 2012
4:45 pm
Love some Reagan,
Come any time. Kyle presents resonable views. Makes a good atmosphere for most.
As to radio & TV, never listen to radio and only at night for TV. Other things are more interesting.
getalife
May 5th, 2012
4:48 pm
“We respect the office but not the man.”
The gop refused to work with him and fought against our recovery for this election.
That is disrespecting the office son.
Man up and admit it.
Rafe Hollister
May 5th, 2012
4:49 pm
Dusty
Great game but I went to sleep before it was over. Wish the Braves could be exempt from the West Coast, but we are done with LA and SD, and soon CO, so just the Giants left.
Love me some Reagan
May 5th, 2012
4:51 pm
Dusty
I lean left on some things, but think the EITC needs to be changed (phased in to start increasing the tax from zero), believe in gun rights, death penalty….. but when looking at effective tax rates (the rate on paper means nothing, it was what is paid that counts) for the top 10% and corporations compared to yrs past……. I am not an advocate of giving any more tax breaks………….