French Election - Hollande Wins
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Soldato
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Subtracting increased debt financing costs and welfare, it has been cut by 0.8%. However, given that direct welfare payments to poor people is supposed to be really good for finding its way back into the economy and exchequer, the net effect is probably even closer to 0%, right?
And? The exposure if the French banking system to the genuine debt crises of other European countries will not be aided one jot by government austerity.
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But it shows the country has a debt crisis. Just like the UK would still have a debt crisis if you nulled government debt.
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It's not a hard question really... Supply side policies are generally the answer. AK model would probably be good here. Long term growth and what not. Solow for medium term, yadayada...
Increasing Long Term growth isn't too hard. Finding a political party willing to do it on the other hand...
kd
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What both countries need and the whole of Europe is actually a bit of consumer confidence....the whole austerity/credit/banking/Eurozone crisis is becoming a self fulfilling prophecy....people have money, they are just too scared to actually spend it because they are being told that the world is about to end.....and people spending money, funnily enough, fuels growth......
Well, it's not a hard question economically, but it is harder politically because the population is full of idiots and morons who want the government to do everything for them, and believe that anything provided by the government is 'free'.
Hmm. Not so much consumer confidence, but business confidence. Consumer confidence would be good too though.
Business are cutting back and/or not expanding, which is a self fulfilling prophecy. If you could somehow convince the MDs of all of the business that a boom was just around the corner and they needed to gear up for it...we'd have a boom.
All the government can really do in the short term is set the stage to make it easier for businesses to expand. In the long term there needs to be serious efforts to improve the quality of the labour force, otherwise all that's left of the British youth with be illiterate, incompetent, unemployable idiots. Also, hi Tyron, I was just thinking about you there.
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As you're probably aware, running a sizable deficit is sometimes necessary to stimulate a change in mindset and direction which ultimately sets the longer term trend. Free market economies aren't very good at lifting themselves out of the doldrums. It requires an entity to look at the bigger picture and take a more selfless approach. A lot of economics boils down to psychology.
If the country weren't already in so much debt people wouldn't question running a deficit in order to stimulate growth.
Having said that I believe the public service cuts should continue and borrowing should be used to finance tax cuts for middle earners (i.e. people who will spend not save) and businesses looking to take on additional employees.
The country needs some good news, and so do the government if they're not going to lose the next election.
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They're not stimulating growth, they're perpetuating a ponzi scheme.
I thought I made it clear that I don't consider it to be so, no.
A Keynesian stimulus doesn't require that, but I concur that, simply put, Keynesianism is precisely that. Running a substantial surplus during the boom, with a substantial deficit during recession.
Yes, and the last thing I want to do is get into an argument about Ricardian equivalence, but I'm sure I don't have to note how important confidence is when people are deciding how to spend their money.
Apples are still not oranges. Conflating the banks exposure with a national debt crisis is nonsense.
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Yes, and this is why the Greek election result could be significant
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Sorry, this is simply wrong, people in the real world have paid and are paying historically high prices for housing, energy and food.
Real inflation is much higher than real wage rises.
All this with interest rates at historically low levels.
It could be that inflation is the real enemy and low interest rates are fuelling it.
Personally I think we need banks to change the way they lend money.
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This is indeed the question
I haven't seen this guy's manifesto, but by the sounds of it, he might drive businesses and hard working, productive people away with heavy taxation. Cool, we'll welcome them with open arms. 
Now what are the chances of him making France a more attractive prospect for benefit tourism? We might see an exodus!
Now what are the chances of him making France a more attractive prospect for benefit tourism? We might see an exodus!
I haven't seen this guy's manifesto, but by the sounds of it, he might drive businesses and hard working, productive people away with heavy taxation. Cool, we'll welcome them with open arms.
This is a definite plus for the UK actually, though the magnitude of the boost we get (if any) remains to be seen.
No-one has mentioned so far that we are stimulating demand in that we've cut (and are further cutting) corporation tax. Dolph is right- however much we think that we need a short-term kick to "boost confidence", in reality we really need to sit it out.
We cannot spend our way out of the doldrums, it's been tried many, many times in British history. Global economic forces are generally too vast for mere governments to try and tame. A spending boost would probably work short term, but what happens once your twelve months spending spree ends?
Making the country as suitable for business as possible whilst getting spending down is a sustainable, long term prospect. We can't turn things around overnight, and shouldn't try to.
The US deficit is only smaller than ours because they've been growing while our economy over the last two years has flatlined. The US economy is now larger than it was before the financial crisis started, while ours is still 4% smaller.
I believe that a sizeable part of America's economic recovery is that they simply have much more of a "can do" attitude and entrepenurial spirit than we do in most of Europe. They are much more willing to take risks and be proactive- plus, the safety net over there is much more threadbare which means it is less of an option to sit and do nothing.