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Comment by aaronbrethorst | Hacker News Reader

Given the authoritative way in which you say:

    [L]iving within your means leads to greater stability,
    a market where prices reflect reality, and people that
    save are rewarded.

I'm guessing you can back this up with a few modern examples of where austerity programs have been successful, right?

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How about in the U.S. in the past couple years[1]?

[1] http://www.forbes.com/sites/johngoodman/2015/01/13/voodoo-ec...

QE is the opposite of austerity. That's what the US is still doing since god knows when.

I certainly agree with you. I'm providing an example that fits Paul Krugman's narrow definition of the word.

QE is definitely not the opposite of austerity. Fiscal stimulus is.

QE means that the central bank buy up bonds. The hope is that this lowers interest rates on bonds, making it less attractive for banks to hoard bonds instead of lending money to companies wanting to invest.

You're right, but I think you would yourself admit you're being pedantic, the great divide between policies in the US and EU was QE (until recently). It was wrong of the previous poster to paint the US as a country following austerity that was successful.

No, it was not wrong. I am simply using the definition of austerity that Krugman commonly uses (see my above post). UK has used QE since 2009[1], BTW, but only government expenditures goes into Krugman's definition.

[1] http://www.bbc.com/news/business-24614016

your sources are bad and you should stop reading them, I've read both of the links you posted before when they were ripped apart by mainstream economists

And yet you provide no sources for this alleged ripping apart.

EDIT: Furthermore your response demonstrates you do not even understand my point. The purpose of the sources I have referenced are not to show support for economic plan A over economic plan B, rather they demonstrate the inconsistent and politically motivated arguments behind Krugman's anti-austerity stance. He states Europe is dangerously pursuing misguided austerity policy which he defines strictly as a cut to government expenditures. He then correlates that with a lack of GDP growth. Then, slyly, when talking of the US, he purports that austerity took place until 2011 when wiser heads prevailed, reversed the trend and then the economy boomed. The problem is, when evaluating the austerity of the US, his numbers include monetary policy, being adjusted for inflation. Why does he not do the same for Europe?

This is all to say, if Paul Krugman is your source "your sources are bad and you should stop reading them... they were ripped apart by mainstream economists".

To quote what another poster in this thread said:

> I've noticed there's a bizarre phenomenon surrounding Krugman where people just refuse to read what he says and instead put all kinds of nonsense into his mouth. It happens to all public figures to some extent, but it just seems really next-level with Krugman (and these particular claims are pretty tame compared with the wild accusations you often see.)

I've better things to do than argue with a misinformed hater, educate yourself and stop listening to austrian charlatans.

Translation: I cannot counter why Krugman compares apples and oranges in his political crusade against austerity so I will rely upon ad hominem attacks.

Yes, anyone who doesn't worship your god must be an austrian charlatan.

I see a lot of people in this thread claiming that massive QE equals fiscal profligacy, that it means that the Keynesians have gotten exactly what they want.

I see QE more as a band-aid, used because fiscal stimulus is politically unattainable, since Keynesians are out of power nearly everywhere. Hence my comment - it was not meant as a nickpick.

And one of the reasons that this isn't having the desired effect is that companies are holding on to far more cash than normal and aren't investing it on future growth.

Australia had a much better idea at the beginning of the GFC, they paid $1000 directly to anyone who had paid at least $1 in taxes the previous year; poor people aren't afraid to spend money...

That's one of the key issues with the current QE process - essentially all the money has gone to the banks / funds etc. in he hope they'd lend it to other producers but the reality is they've used it to make their own profits at others expense.

A better approach might have been to give it to the people to spend, save, pay off debt as they wished.

I'd have given it to people on welfare as well as tax payers.

I'm always suspicious of people like Krugman who claim to know the answer but didn't see the crisis coming.

You might want to check this curated list of people who "predicted" the GFC. Some of the names on the list(s) were a surprise to me. The one person I respect greatly on this list is Steven Keen (he featured highly in both lists).

http://www.investorhome.com/predicted.htm

EDIT: fixed spelling mistake

Krugman doesn't claim that the U.S. has experienced (significant) austerity during the last couple of years, especially compared to Europe. See the chart, which shows that austerity peaked in summer 2011. [1]

[1] http://krugman.blogs.nytimes.com/2014/12/28/the-obama-bounce...

In talking of austerity Krugman neglects monetary policy[1] ("The key measure you want to look at is the ratio of debt to G.D.P." [2]), yet that chart you reference is inflation-adjusted 2009 dollars. That is to say, it is an apples to oranges comparison if we are going to talk of Krugman's version of austerity.

[1] http://www.forbes.com/sites/realspin/2015/03/12/the-austerit...

[2] http://www.nytimes.com/2013/05/06/opinion/krugman-the-chutzp...

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