Wednesday, February 11, 2015
A Game of Chicken
http://www.nytimes.com/2015/02/06/opinion/a-game-of-chicken.html?_r=0 DUE 17 FEB 2015. READ BOTH "A GAME OF CHICKEN" AND "KANSAS FEELS THE PAIN FROM BROWNBACKS TERRIBLE BUDGET." Compare and contrast the opinions of Paul Krugman and John Hanna in relation to the use of austerity in controlling government economies. What are the advantages? What are the disadvantages? Can you suggest a different approach to solving the problems of Greece and Kansas??
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Krugman feels the use of austerity in controlling government economies does nothing but harm the nation. In Greece's case, the country has already attempted enforcing austerity, but was met with poor results. Now that Germany demands for payment of Greece's debt in full by utilizing harsh austerity, the European union faces a problem. Should the Central Bank choose to cut off Greece's access, the European Union's dream of achieving "peace and democracy through shared prosperity" will fall to ruin as Greece eventually will leave the euro and establish its own currency due to its banking collapse.
ReplyDeleteWhile austerity may prove to finish immediate budget concerns, as seen in Brownback's extreme cuts to education and public pension utimately, cutting the costs in order to satisfy a debt will cause an unrest, as seen in the people of both Greece, and the citizens of Kansas in response to Brownback's methods. Austerity would not be the best method to solving these budget problem as they cause a disturbance with the nation's citizens.
Paul Krugman believes austerity will pose enormous risks for not just Greece or Europe’s economy, but to the whole European project of building peace and democracy through shared prosperity that lasted 60 years. A banking collapse on Greece’s part would lead them to leave the euro and establish their own currency. He blames Angela Merkel, the German chancellor, and her colleagues. Also he blames Greece’s irresponsible spending and Germany’s irresponsible lending.
ReplyDeleteThe advantage of austerity is the ability to pay off their debt. Greece owes Germany a lot of money due to borrowing. But the downside is that Greece will never be able to pay the debt in full which Krugman states is obvious to anyone who done the math. The only way Greece can fully solve their problems is to have Germany lower the debt out of consideration which does not seem likely. They are entering a Great Depression and still owe Germany much if their debt.
In regards to austerity, Krugman believes that it has harmed the Greek economy without doing any good. By hurting the Greek economy, the austerity measures have also hurt the European Union since Greece is a member of it. He thinks that Greek got itself into the mess through irresponsible borrowing and there is no way that Greek would be able to pay off its debts in full.
ReplyDeleteAdvantages to austerity are that it helps reduce budget deficits which gives investors greater confidence. The disadvantages of austerity are in the case of Greece, higher unemployment rates, decreased GDP, reduced growth, and public spending cuts; in Kansas, austerity has angered residents. The people of Greece are now angry with austerity measures because they are unable to find jobs and have experienced the cuts in public spending. Kansans are mad that spending has been cut in order to balance the budget. They are against infrastructure and educational spending cuts because the repairs to bridges or highways in vital for rural residents transportation needs.
A different approach to solving the problem in Greece would be debt relief and easing of austerity, as suggested by Krugman. Debt relief would allow the Greek debt to grow slower but would require cooperation from Germany who is not on Greece's side. Easing of austerity could help unemployment rates and growth rates. In Kansas, cutting spending from other sectors could be a solution. Infrastructure spending should take priority for the state because it is so important. Money could be taken from other sectors in order to pay for the repairs and building of infrastructure.
Both John Hanna and Paul Krugman share similar views on the use of austerity to balance government budgets.They both feel that the loss of public programs poses a greater harm to society than any benefit derived from lower taxes. Paul Krugman used Greece as an example to further his argument. Krugman painted Germany with a negative light for forcing Greece to practice austerity. He claimed that Germany was unjustifiably concerned with its debt repayments from Greece, when they really should have been concerned with the prosperity of the EU as a whole. Krugman also claims that austerity is to blame for the rise of sinister political parties, for example the Nazi party. Hanna uses Kansas as an example to further his argument. He talks about the state highway infrastructure, and the impact that austerity might have on this project. Hanna says that reduced funding for the highway system will put the state behind its peers and rural communities that rely on these highways will suffer.
ReplyDeleteA key advantage for practicing austerity in both cases is that the borrower pays down its debt. This means that both Kansas and Greece can avoid defaulting on their loans and they will be able to improve their credit rating. In addition, if Greece continues with austerity then it will please Germany and maintain the integrity of the EU. In Kansas' case, maintaining austerity might eventually pan out in attracting businesses that want to take advantage of the low tax rates.
The disadvantages of austerity are those that Krugman and Hanna pointed out. People will become upset if they lose public programs.
I think that austerity is the best method for balancing a budget. I don't think that countries or states can run away from their obligations forever, and a country like Germany has a right to be upset as a creditor if it does not receive its money back. Left-wing economists like Paul Krugman think that discontinuing austerity is the best alternative. These economists believe that increasing public spending will boost demand for goods and thus increase tax revenue. This theoretically reduces the deficit and keeps the public happy. The only problem with this is that the government that owes money can not always be trusted by creditors to spend money on programs that increases public demand for goods. In addition, increased government spending might also lead to inflation.
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ReplyDeleteBoth Paul Krugman and Joan Hanna agree that the use of austerity in controlling government economies has proved to have negative effects on the economy. Hanna talks about how in Kansas spending on things such as education and infrastructure has to be cut in order to close its deficit and people are not happy with the decision.
ReplyDeleteThe advantage to austerity is that the policies can help a state or country pay off the debt that it may have. The negatives however is that the money usually comes from cutting the spending on other projects such as the highway and bridge repairs in Kansas. People in Kansas have become worried as these bridges are becoming old and need repairs as they are very important to the people as they use them to traverse to work and school, and cuts to education can have an effect on the education that students receive and may result in many other important programs being cut. This is a reason why the people in Greece are also unhappy becomes many of the government programs that they benefited from and needed have been cut over the year, which is what make austerity so unpopular with them.
Another solution could be to increase taxes or find other programs to cut spending on.
Paul Krugman describes austerity as a generally bad idea, his example was the Greek. He states, austerity has done nothing positive for the Greece besides dig it into a deeper hole. Hanna also agrees that the application of austerity forcibly has done no good what so ever.
ReplyDeleteThe advantages to austerity are balancing the budget, it allows the state or country to pay debts off, but to save money now u has to be cut from some were else. Normally from schools , new development, and other public services. Even though austerity Is not the best method it's the only option I really see to even help the Greek, there debt is to high they are just going to have to make some sacrifices for a while.
John Hanna and Paul Krugman both share a similar view on using austerity to balance government budgets. They both feel that there is more harm than benefit that comes out of it. Pal Krugman uses Greece and Germany as examples while John Hanna points to Kansas. Krugman blames austerity for the rise of the Nazi party and Hanna talks about the state highway system. He says that austerity will causes the highway system to deteriorate because it will lack government funding. I agree with this point, but I do not agree that austerity led to the rise of Nazis. One of the main disadvantages of practicing austerity is that the public will lose out on publicly funded projects. Another advantage is that is the government cuts back on its spending, it may overlook important needs of the people. However, an advantage of austerity is that is can save a lot of money for the government and country. Another advantage is that the country can then pay back its debt and not have to default on their loans. A different approach to solving the problems of Kansas and Greece besides austerity is to increase taxes instead of lowering spending. The government should only spend what it has to begin with. I feel that the government should tax the wealthy more because they are able to pay more. Instead of building wells or school in Africa, help out your own country.
ReplyDeleteOn the practice of austerity, policies used by governments to reduce budget deficits during adverse economic conditions, in Greece, Paul Krugman believes that it poses enormous risks and can only harm not only Greece, but the entire European Union, as “A Greek banking collapse would probably lead Greece to leave the euro and establish its own currency” and if this happens “investors would be put on notice that Europe’s grand currency design is reversible.” Krugman blames the “irresponsible borrowing” by Greece, and the equally “irresponsible lending” by Germany, and sees Germany as being unreasonable to expect Greece to pay their debts in full.
ReplyDeleteJohn Hanna believes that austerity practices in Kansas are not working. He says that Kansas is “living in fantasyland” and that the austerity practices are going to lead to long-term problems in Kansas. The austerity in Kansas is so bad that Hanna has quotes from several conservative republicans, which advocate austerity, condemning austerity practices in Kansas.
Advantages of austerity is that it can allow the government of a nation to prune away any unnecessary expenses and it will allow the nation to pay off its debts. In these cases, Greece will be able to pay Germany back and Kansas will be able to bring its credit rating back up.
However, there are many disadvantages in austerity, if Greece and Kansas continue with austerity, many public programs can and will be cut. These include necessary programs that cannot afford to be cut such as roads and schools and the police force. Also, the unemployment rate, in Greece especially, has skyrocketed. Citizens of both Greece and Kansas are unhappy with the outcomes of austerity practices and it is clear that it is not the best way to fix the economy.
A different approach to solving the problems of Greece and Kansas is necessary. Austerity has not helped them, only pushing them further into economic trouble. I would suggest that in Greece, debt relief and allowing the economy to grow, as well as Germany not demanding all of their debts to be paid back at once, would be a better solution. In Kansas, not cutting the budget for roads would be a good place to start as “many rural communities see good roads and bridges as essential to their economic survival.”
Both Paul Krugman and Joan Hanna share similar views on austerity and how the adverse measures to control government spending harmfully affects the economy. In Krugman’s case, he believes that austerity has harmed Greece due to Germany’s enforcement of austerity. Greece stops with the austerity practices and in turn this affects the European economy as a whole. Krugman further states that Greece got itself into this situation in which they cannot pay their debt in full but Germany keeps demanding that the debts must be paid in full. In this situation Germany keeps repeating their policy while Greece can take no more. Within Hana’s case, Kansas Governor Sam Brownback plans to cut education spending, public pension contributions, and divert the money used for infrastructure to be used to close off Kansas’ deficit. This in turn harms Brownback’s rural supporters with no improvement on the nearby highways.
ReplyDeleteAdvantages would include how the borrowing country can pay off their debts with austerity policies. In Kansas’ situation Governor Brownback plans to close of a $344 million deficit through practices that greatly affect the population. In Greece’s case, if the country were to continue their austerity practices, they could eventually pay off their debts and maintain a healthier relationship with the Germans. Disadvantages would include the majority of the population getting mad due to austerity’s harsh affects, such as tax increases or cutting spending on certain government programs. In Kansas Governor Brownback proposed to cut spending on public schools and state universities by $45 million, which in turn will lead to tuition spikes. This means that the people will inevitably have to pay more to send their children to universities.
In Greece’s case, austerity aims the country in a direction that will only further harm the country. With debt relief and easing of austerity, Greece’s economy would be able to slowly grow towards a more positive outlook. In addition, if Germany were to stop demanding for Greece to pay back their debts in full, this would allow the country to worry less about austerity and focus more on the reconstruction of their economy. In Kansas’ situation, a solution to their problems would include redirecting the cutting from infrastructure and education to other government sectors. This will lead to a less impacting cut on necessities to the people and in turn making the population less mad when it comes these large budget cuts.
With regards to the Greece crisis, Germany is demanding that Greece keep trying to pay its debts in full by imposing harsh austerity. Krugman believes that if the central bank cuts off support to Greek banks Greece’s economy will become even worse than it is already. Krugman says that the European project of “building peace and democracy through shared prosperity” will be undermined if they cut off Greece. Also if Greece abandons the Euro it could cause other countries to abandon the Euro as well. Krugman does not blame Greece entirely for its problems. He thinks that “irresponsible lending” led to the Greek depression especially from Germany and he states that Germany needs to wake up so that the situation does not get worse. On the other hand in John Hanna’s situation Sam Brownback has cut taxes drastically in Kansas because he believes that it will result in a benefit to Kansas’s economy because of increased business. John Hanna like Paul Krugman does not support harsh austerity. Hanna believes that Brownback’s policies of cutting taxes while cutting spending on education and infrastructure. Advantages of austerity policies would be contributing all of a society’s resources to the economy and being able to efficiently raise money for the government. Disadvantages would be a decrease in the importance of aspects of society that do not bring in revenue such as education which would hurt the nation in the long run. Also the people would become very angry if they felt that they were being cheated so they would protest and riot against the government. I think that Kansas and Greece need to disregard outside pressures and work on their domestic economy. Kansas needs to elect a new governor and Greece needs to become more independent. They need to focus on welfare policies and start from the bottom up with healthcare and infrastructure. Both Kansas and Greece need to abandon austerity.
ReplyDeleteBoth Paul Krugman and Joan Hanna share similar views on austerity and how government measures taken for control over spending can negatively affect the economy. In Krugman's view, Greece is currently having difficulties with Germany based on debt management. The large debt that Greece owes Germany is making Germany dictate that Greece should remain on austerity policies until the debt is completely paid off. Hanna's view is that Kansas is planning on cutting education and infrastructure which can and will cause the deficit to be paid off but at what further price than just the deficit must be given to pay off the debt.
ReplyDeleteAdvantages would include: how the borrowing countries can pay off debts through austerity policies and the government will cut back on spending that is either excessive or unnecessary. For example, in Kansas’ situation, the governor plans to close the deficit through practices that can affect the population. For Greece’s situation, the country can pay off their debts through the austerity practices. However, the major disadvantage to austerity is the lack of public investment on public projects, such as school education, infrastructure, etc. Kansas' governor proposed to cut spending on public schools and state universities by $45 million, which in turn will lead to spikes in the economy for tuition.
A different approach to solving the Kansas and Greece difficulties rather than using austerity is to cut unnecessary public programs, but keep important ones such as education and infrastructure. These two public programs are necessary to benefit society in the near and upcoming future. Austerity policies is in the direction that will cause further negative impacts for the countries/states and if it were to continue more negative affects will occur leading to more possible debt.
The practice of Austerity as a solvent for debt is agreed by both John Hanna and Paul Krugman as ineffective. Paul Krugman denotes the practice as a standstill between demands put on Greece and the effects it as on the economy. John Hanna criticizes austerity by Kansas Governor Sam Brownback which fails to close the $344 million dollar deficit and continues to slash budgets and cut tax rates.
ReplyDeleteThe advantages of Austerity is that it prioritizes paying back debts owed and cuts excess spending. Paul Krugman states that pressuring the use of Austerity has forced Greece to control spending and prioritize the essentials over non essentials.
The disadvantages is that Austerity hinders economic stimulus that would have helped the economy grow. John Hanna states that austerity has called for the reduction of education spending and infastructure investment. Austerity prevents economic activity that would have otherwise occured with deficit spending.
In solving the problems in Greece and Kansas, i think a combination of both austerity and increased spending would maximize benefits. Austerity practices take away excess spending and increased spending would rise where its needed. Austerity and increased spending do not work by themselves as we have seen. Out of control spending complies the debt to new limits, while austerity reduces the debt also is incredibly slow to the point that it does not solve for poverty.
In both instances, Kansas and Greece are in economic downturn and have reached cross roads on the next approach to the problem. While both sides use basic logic to argue their sides, waiting on a plan will not solve for anything.
Paul Krugman and John Hanna have similar opinions on austerity. They believe that austerity won’t fix the problem and would do more harm than good. Paul Krugman says that equalling spending and income creates no growth. Advantages of austerity include that borrowing is equal to income so a bigger debt is gained. This helps with preventing a government collapse from a large debt. That helps down the road for a more stable economy and sets an example that a government shouldn’t spend more than its income. Disadvantages of austerity include that if the government was overspending, they
ReplyDeletehave to cut from policies set in place from borrowing that money. For example, if the government borrows and spends it on cheaper products, then austerity would bring those prices up, in turn, making the public unhappy. However that is just an example, and the reality is sometimes spending is cut in more important areas such as education.
Krugman and Hanna both agree that austerity generally has more negative effects than positive ones. Krugman uses Germany and Greece as an example, while Hanna looks at Kansas. Krugman says that austerity has caused conflict in the EU, blaming Germany on focusing too much on making Greece pay its debt back rather than focusing on the prosperity of the whole EU, while Hanna looks at the decrease in education and infrastructure in Kansas. An advantage to Austerity is that it could help to pay off debts and reduce deficit spending, however it decreases public spending, raises unemployment rates. An alternative to austerity is to spend more on the public sector without unnecessarily spending.
ReplyDeleteKrugman and Hannah both feel that austerity is usually not good for a country, and that it is currently hurting Greece. Krugman uses Greece as an example, while Hannah uses Brownback and Kansas as his example. Austerity can be good in that since spending equals income, no more debts are incurred and there is a priority on paying back debts. The bad thing about Austerity is that since their is less government spending, Economic growth slows down, in addition to the public suffering from reduced public services. In both Kansas and Greece, a new approach is needed. In Greece, it would probably be best if they eased off austerity gradually, as they are too far in it now to just pull out immediately. In Kansas, they could just stop cutting spending, or redirect the money spent to other areas.
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ReplyDeletePaul Krugman and John Hanna have similar opinions on austerity. Krugman believes that Greece is currently having difficulties with Germany based on debt management. The large debt that Greece owes Germany is making Germany dictate that Greece should remain on austerity policies until the debt is completely paid off. Haha believes Kansas Governor, Sam Brown back, plans to cut education spending, public pension contributions, and divert the money used for infrastructure to be used to close off Kansas’ deficit. This in turn harms Brownback’s rural supporters with no improvement on the nearby highways.
ReplyDeleteThe advantage to austerity is that the policies can help a state or country pay off the debt that it may have. The negatives however is that the money usually comes from cutting the spending on other projects such as the highway and bridge repairs in Kansas. People in Kansas have become worried as these bridges are becoming old and need repairs as they are very important to the people as they use them to traverse to work and school, and cuts to education can have an effect on the education that students receive and may result in many other important programs being cut. This is a reason why the people in Greece are also unhappy becomes many of the government programs that they benefited from and needed have been cut over the year, which is what make austerity so unpopular with them.
In solving the problems in Greece and Kansas, i think a combination of both austerity and increased spending would maximize benefits
Both John Hanna and Paul Krugman believe that the use of austerity has brought up more bad than good. Republican Governor Brownback of Kansas closed a $344 million dollar loss through budget cuts. However, these budget cuts were made through important areas of both education and infrastructure. John Hanna believes that budget cuts in these areas are not beneficial to the people of Kansas because they rely so much on infrastructure in order to travel around rural areas of the state. Yet Republican Governor Brownback has also made tax cuts and politicians from Kansas from both parties agree that Brownback’s policies have failed their state.
ReplyDeleteAn advantage to austerity programs would be that the policies are able to help a country or state to pay off any debt they may have incurred. However, disadvantages to austerity programs would be that acquiring the funds to pay off any debt leads to budget cuts on infrastructure projects such as building highways or repairing bridges, which is what is happening in the state of Kansas. These bridges in Kansas are becoming older and older and the people are worried they might one day collapse. The people want the bridges to be repaired because they are considered a mode of transportation for the people of Kansas to travel from home to work or school. Yet more and more budget cuts are being made and especially to education which affects the student’s capacity to learn in school.
A different approach to solve the problems of Greece and Kansas would be to start increasing taxes rather than trying to lower spending. The government should not have any reason to spend more than necessary and so they would not need to lower spending costs at all. Also, I believe that the government should start taxing the wealthy more since they are able to pay higher taxes with their income. There will be no benefits for Kansas if the government does budget costs for highways and bridge repairs since the people of Kansas consider the infrastructure and education important parts of their lives.
Krugman and Hanna both agree that austerity is not only inefficient at lowering the debt that a government faces but that it also hurts the economy way more than it could possible help it. So both of them would agree that austerity isn't the preferred method to control government policy. Hanna use Kansas as the example of austerity gone bad, not only did Kansas cut government spending but it also decreased its own revenue. So programs like education and improvements to roads were cut. This hurts business because roads and bridges are needed to buy and sell goods, Kansas is cutting the most basic requirements for business to make money. At the same time they are cutting taxes for the top 29% and business owners under the justification that more business will come to Kansas but they have yet to come. Krugman uses Greece as his example mostly focusing on how they are almost being forced to practice austerity by Germany saying that Germany is saying that the European bank will no longer support Greece's banks if they don't practice austerity. Krugman than says that since austerity has done so much damage to Greece and they literally voted against austerity they probably won't move toward it again. He says that if they do lose support from the bank they will be forced to change currency which paves the road for all sorts of problems.
ReplyDeleteThe advantage of austerity is that you may be able to pay off your debt faster.
The disadvantage of austerity is that you must cut programs that aren't just important for the short run but also for the long run of the society. Education probably being the biggest one if education based programs go down then your popluation is a lot less educated. I don't even need to get into the immeasurable impacts of having an uneducated society.
An alternative would be to increase taxes while at the same time increasing investment based spending by the government this will shrink the debt at almost a zero pace for a short time but in the future not only will the investments benefit the community but the debt will be payed off.
Paul Krugman and John Hanna have similar opinions on austerity. Both agree that austerity generally has more negative effects than positive ones. Krugman believes that if the central bank cuts off support to Greek banks Greece’s economy will become even worse than it is already. Krugman says that the European project of “building peace and democracy through shared prosperity” will be undermined if they cut off Greece. The advantages for practicing austerity in both cases are that the borrower pays down its debt. In Kansas, Governor Brownback plans to close of a $344 million deficit through practices that greatly affect the population. In Greece, if the country were to continue their austerity practices, they could eventually pay off their debts and maintain a good relationship with the Germans. The disadvantages of austerity are those that Krugman and Hanna pointed out, tax increases or cutting spending on certain government programs. People will become upset if they lose public programs. Another solution is to cut government programs and spending.
ReplyDeleteBoth Hanna and Krugman believe austerity is a bad economic policy. In the case of Greece, austerity has led to a giant deficit that they cannot pay off. In kansas, austerity is leading to more and more budget cuts to key programs like education and infrastructure. Germany wants Greece to continue austerity because it would help Germany get its money back from Greece while Greece suffers. Greece is finally looking to end austerity with its new leadership who oppose it. Kansas is continuing its policies of austerity despite more cuts being made than Brownback wanted. Brownback still believes his tax cuts will be successful and enough money will be left to pay for infrastructure.
ReplyDeleteThe advantages of austerity are that the government can pay off debts and not waste money on unnecessary expenditures. The disadvantages of austerity is, like in Kansas, sometimes necessary programs must be cut in order to pay off the debt. The government may pay off its debt but at the expense of its own people who lose out on things like education, which is key to the future of the region.
A different approach for both Kansas and Greece is to increase taxes and spending. In Kansas, Brownback needs to recognize that his experiment isn't working and they need to return to policies similar to those that they had prior to Brownback's changes. In Greece, a fix may not be as simple. They may need to gradually reduce austerity and hope that things get better over time. They may need some help from other countries to recover and Germany certainly is not helping right now.
Paul Krugman believes that austerity will pose enormous risks for the whole European plan of building peace and democratic government through shared prosperity. A banking collapse would cause Greece to leave the euro and create their own currency. He looks to Angela Merkel, her colleagues, and Greece’s spending habits and Germany’s lack of discretion when it comes to lending.
ReplyDeleteThe advantage of austerity is the ability to pay off debt. Greece owes Germany a lot of money from their constant borrowing. Greece at this point is unable to pay the debt in full which Krugman saw as a given to anyone who noticed the pattern. The only way Greece can pay back the debt is to have Germany lower the debt out of consideration, which may not be possible. They are basically entering a depression.
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ReplyDeleteJohn Hanna and Paul Krugman both believe that austerity policies are harmful to any economy. Krugman on the case of Greece realizes how harmful the austerity policies were and how they led to a huge economic deficit and debt that is nearly impossible to cut back. Hanna on the case of Kansas realizes that the austerity policies are leading them to have to have major budget cuts on important industries like education. The economic advantages of austerity are that the government is able to pay off any debt faster because they don't have to worry about other programs like infrastructure and education. The disadvantages are that the country will not be able to advance because there will be no funding in education and infrastructure so the standard of living will gradually decline. In both countries they need to raise taxes and cut back only on programs that are unnecessary. They should also try and increase spending which in turn will stimulate the economy creating more jobs and more tax funds.
ReplyDeleteThis whole problem started because of a deficit. And now people are doing the idiotic thing and stopped "spending" on very integral parts of their society. Like in Kansas. Where the governor will cut $158 million dollars from road projects and $45 million from Public schools. Now is it smart to try and make more money by stopping one of the services that most helps in the creation of capital, Education, and to cut funding on one of the ONLY things that is distinguishable about this state, the road system? Krugman presents evidence that Austerity in countries suffering from a recession is bad on his article "The Record of Austerity", adding validity to John Hanna's view points. Austerity is not the solution. It will only contribute to the problem. A similar situation is occurring between Greece and Germany. Greece borrowed too much, and Germany wants Greece to pay back, so Germany is threatening to cut their money supply to Greece if Greece doesn't practice austerity, which they said they won’t. You have to take into consideration the role of government and the relationship between the government and its people. At heart, the government is here as a form of a binding social contract. It functions if most of the citizens are content enough with the government to let it operate by itself. Under the circumstances that most people at not happy, some sort of reform will occur, be it from within the government or from an outside source who tries to seize control. So for Government to work you need to keep citizens safe and happy. You keep them safe by spending a lot of green papers with little drawings and numbers on them on cool black things that shoot projectiles from one end, and on very nasty mean men who know how to use those black things. You keep them happy with low taxes, enough green paper for TV and a car, a nice house, next to a lot of other nice houses, and a black rocky surface connecting every part of your country. So how does a government even think it is possible to operate like its supposed to if it decides to not spend any green paper at all? Its absurd. Debt is a way to make money, but so is war, and that doesn’t mean we should throw our people into the fire every time it burns enough green paper just to see if we can save some of that paper from burning. Why do we think differently about borrowing money? We do it without thinking. Is that not the reason we are currently coming out of a Depression (oh lets not scare everyone and lets call it a GREAT RECESSION)? There is a difference between spending and investing. Paying for a cruise ticket = spending. Paying for a new work computer = investing. How can we expect the whole to be greater than the sum of the parts like Aristotle said, if even the parts have no idea what they are doing. We might as well fill a room with monkeys, have them write in tiny pieces of paper, fill a hat with the papers and pull the papers out until something cohesive comes out. Well the Greek government seem to be doing just that, and the Germans aren’t doing much better, and apparently the Kansas governor is also failing. The best course of action here is not no course of action (so not austerity) and not massive government intervention (no more debt and no more war). The solution might be as simple as to ask for help. If citizens are informed of the issues they might help. Taxes seem like a burden, and donations seem like a hassle, but nobody cares enough to ask people for help. Yes green paper is amazing, but ideas are more valuable, and if you ask 50 people what to do they will give you more than 50 answers. The community is also at fault. People should be amassing together and making their voices herd if they don't like what is going on. Government is as much a a business as anything else, and citizens are its consumers. Lets ask the consumers how to help the business. and lets make sure we listen, because in this day and age sometimes we cant even hear ourselves, let alone listen to others.
ReplyDeleteOn the subject of austerity, John Hanna and Paul Krugman share critical views on its practice. The harm clearly outweighs the benefits. Krugman uses Greece and the ongoing conflict with the European Central Bank as an example. Krugman recognizes the grave repercussions that may arise if the central bank cuts off support to Greek banks. If Greece abandons the Euro and establishes its own currency then other countries may follow Greece’s initiative. Accompanying a possible exit from the European Union, Golden Dawn, a political party with Nazi ideals, may gain momentum and begin to influence Greek politics. Krugman does not blame the Greek crisis entirely on Greece as he notes that irresponsible borrowing could not have happened without irresponsible lending. Hanna uses Kansas as support and points out that the austerity practices in Kansas have not delivered the intended results. In fact revenues have fallen short of expectation and fellow Republicans have voiced their displeasure with the cutting. Brownback’s cutting diverts money from highway projects which rural communities would like to see happen.
ReplyDeleteAdvantages that accompany austerity are reducing a growing budget deficit and not have to default on loans. In Kansas, Brownback would be closing a $344 million deficit and their recently downgraded credit ratings may rise. As for Greece, it may look forward to a healthier relationship with Germany and the European Central Bank. The lower taxes in Kansas may serve to attract businesses and benefit the economy. Disadvantages of austerity for Kansas are cutting on public schools and state universities and the diversion of money from highway projects. Parents will encounter skyrocketing tuition fees. For Greece, the quantity and quality of services and benefits provided by the government may diminish.
A different approach to solving Kansas’ problems is to increase taxes and reallocate budget cuts. The cuts in infrastructure and education are highly detrimental to Kansas. Rural communities see good roads and bridges essential to their economic survival. In the long run, an uneducated society in all cases is not desired. As for Greece, debt relief or even the elimination of austerity may be the way to go. After all, that is what Alexis Tsipras promised the Greek public a few weeks ago.
Paul Krugman and John Hanna both believe that austerity causes more harm to a country's economy than it does good. But the fact of the matter is that Germany will continue to be upset until they have received their money from Greece. Hanna discusses Kansas in relation to austerity and how it can cause a lot of damage to an economy. In Kansas, they are cutting back spending on infrastructure such as the highways which poses problems for the population.
ReplyDeleteAdvantages to practicing austerity include being able to pay back debt no matter the severeness of the practice. Governments will cut back dramatically on important expensive projects in order to please their creditors. Disadvantages of course include the damage and effects that come with cutting back on public programs such as education.
Regardless of the inefficiency of austetity, I feel that it is effective in being able to pay back debt because of the dramatic cutbacks in government spending. The real question that these people who practice austerity need to ask themselves is "is it worth it?". It is just a matter of what lengths these countries must take in order to reduce debt.
Both Hanana and Krugman make a strong case against the economic policy of austerity. Hanana primary focuses on the austerity policies of Kansas and Brownback's policy. Austerity has lead to Kansas having to cut important areas of the government, but primary they are cutting education. Krugaman prefers to focus on the Greek economic policies have lead them to a huge economic deficit, of a scale they can not get out of.The pros of austerity is that it is quicker to pay off debt not having to pay for extra social programs. The cons are the fact that your cutting all those social programs so your populace will be living in poverty. Education and infrastructure will also be cut so that jeopardizes your countries future. Both Greece and Kansas can solve their problems by lowering taxes and increasing spending to spur business.
ReplyDeleteBoth Paul Krugman and Joan Hanna agree that austerity policies do not work in the real world. Krugman weighs in on the impacts of Greek's debt and how the use of austerity hasn't done much for the economy. Hanna discusses the use of austerity in Kansas and how this fiscal policy is harmful. In Kansas, there have been major cuts to education and even towards roads.
ReplyDeleteThe only advantage of austerity is that the policies can help mitigate growing debt and limit spending. Disadvantages are the major cuts. When there are budget cuts to education, there are higher tuition rates, losses to summer programs, and less classes for at-risk students. Money is also being diverted from internal improvements and from pensions.
Other solutions for both Greece and Kansas could be disregard the austerity and to implement more comprehensive policies. Increasing taxes and placing tariffs could easily bring in more revenue to help solve the debt problem.
When it comes to balancing the budget, both Hanna and Krugman share common ground on how austerity should be implemented. Clearly, as seen in Greece, austerity is the poorest way to outline a good budget plan and restart a deadening economy. Krugman relates this idea back to the ECB, where any bank cuts to support Greece would only hurt the bank itself – a currency going down in value. Greece’s downfall can hurt the euro and thus many other countries. What he instead suggests is the creation of a new currency that stops the growing imbalance between Greece and the other European members. However, Krugman also outlines the notable disadvantages of this action (either way, there are poor consequences), as Golden Dawn – a neo-Nazi group – may gain more influence on Greece in its weak state. Krugman is upset, not only at Greece, but at those who lent Greece the money – feeding what should not be fed.
ReplyDeleteWhile Krugman had a very global view on austerity, Hanna used a more national, centralized vision with Kansas, a state that has recently tried out austerity with dismal results – capitalizing on the doctrine that businesses are inherently job-creators, and not the reverse. Austerity is certainly reducing the budget deficit, raising credit and benefiting the companies, but it also means cutting down on public schools (both high school and college) and diverting money from projects that benefit a nonexclusive consumer, like highway projects. Even though deficit is down, tuition goes up. Greece, in turn, is also seeing a downgrade in benefits as the deficit decreases.
What I believe would be another way in solving Kansas’s problem is to end austerity – the advantages cannot outweigh the disadvantages to the public. This would be done by increasing taxes and cutting in places that would put more weight on the business than the people. Education is a number one priority, and should not have any tax cuts. In this same way, I believe Greece should leave. It’s causing more harm attempting to keep itself austere, hurting a currency and other countries in its path.
Krugman and Hanna have a common opinion about austerity. They both announce that it is an inefficient economic policy that does more bad than good. In their respective articles, Krugman uses Greece as a main example of bad outcomes of the use of austerity. A massive deficit has built up, and Greece cannot fight it. The worst of their situation is the fact that Greece is practically being forced into using austerity by Germany. By threatening to discontinue the support of Greece’s banks, Europe is giving the country no choice in the matter. Hanna uses Kansas as an example of the downfalls caused by austerity because the state not only cut government spending but also decreased its own revenue by about $344 million. This means Republican Governor Brownback has led Kansas to suffer from a lack of road improvements and education. Businesses were hurt by these actions, because less transportational methods was available to buy and sell goods. Additionally, the top 29 percent were having tax cuts under the belief that things would get better, and more business would come to the state, which has yet to actually happen. Austerity proves to have an abundance of disadvantages to those using the system. They include program cuts to those significant to the function of societies throughout, such as an efficient education system. Austerity isn’t a completely bad idea, because the system allows governments to pay off their debts far faster, with less extensive expenses. The government may be able to pay off its debt, but at what cost? An alternative approach for Greece and Kansas may be the idea of increasing taxes as well as investment based spending. rather than proceeding with this plan cold turkey, it would be a better idea to try to slowly wean off of austerity as to prevent any shocks or drastic effects of government shifts.
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ReplyDeleteDespite their differing approaches, Hanna and Krugamn meet eye-to-eye on what has proven to be a very abortive practice: economic austerity. This belief that businesses are job-creators is slowly being mythicized by the current state of Greece and Kansas. Greece has felt the repercussions of austerity along with the rest of the European continent. A state’s poor economic status affects the currency of others, in turn affecting those economics. Austerity has become a global issue. This is not entirely Greece’s fault, nor all of austerity’s, for Krugman notes that the European Central Bank was wrong in lending so much to Greece, almost leading to the country’s defaulting. Krugman is more negative of the current implications of austerity, saying that – if extremes and last resorts be needed – Greece should leave the euro and restart. This could cause problems with the neo-Nazi group “The Golden Dawn,” but it would be a safer route economically (perhaps not politically).
Hanna instead approached it through the latter topic, Kansas, and austerity plans that have provided a mix of advantages and negatives. Austerity has proven beneficial to the business – tax cuts have opened more jobs, though that hasn’t necessarily meant a stimulated economy. In fact, it seems as though this austerity has “inflated” (the exact opposite of what one would think), as the price of public schools has gone up as money is diverted elsewhere. Similarly, Greece has seen rising tuition prices as well. This isn’t just schools, but highways and other projects that are much needed for the public.
In order to solve this problem, I believe drastic times call for drastic measures. Clearly, austerity has not proven well this past year for Greece and will not continue to do so (estimates were much more positive than the current reality for Greece). I believe Greece should leave the euro union, start afresh, and implement more liberal policies – increasing taxes on businesses and creating progressive taxes that would still lower the deficit. Regardless, the deficit isn’t necessarily a bad thing – but a simultaneous lowering and stimulating of it would help jumpstart the economy. Kansas should implement similarly.
Both Paul Krugman and Joan Hanna agree that the use of austerity in controlling government economies have negative impacts. Paul Krugman believes austerity will pose enormous risks for not just Greece but Europe’s economy; By hurting the Greek economy, the austerity measures have also hurt the European Union due to Greece being a member of it. John Hanna points to Kansas; Hanna talks about the state highway system. He says that austerity will cause the highway system to deteriorate because it will lack government funding.
ReplyDeleteAdvantages of austerity are that it can allow the government of a nation to prune away any unnecessary expenses and it will allow the nation to pay off its debts. If Greece were to continue their austerity practices, they could eventually pay off their debts and maintain a good relationship with the Germans. Disadvantages would be a decrease in the importance of aspects of society that do not bring in revenue such as education which would hurt the nation in the long run. A different approach to solving Kansas’ problems is to increase taxes and reallocate budget cuts. As for Greece, debt relief or even the elimination of austerity may be the way to go.
John Hanna and Paul Krugman both share a similar view on using austerity to balance government budgets. They both feel that there is more harm than benefit that comes out of it. In Krugman's view, Greece is currently having difficulties with Germany based on debt management. The large debt that Greece owes Germany is making Germany dictate that Greece should remain on austerity policies until the debt is completely paid off. Hanna's view is that Kansas is planning on cutting education and infrastructure which can and will cause the deficit to be paid off but at what further price than just the deficit must be given to pay off the debt. The advantage to austerity is that the policies can help a state or country pay off the debt that it may have. The negatives however is that the money usually comes from cutting the spending on other projects such as the highway and bridge repairs in Kansas. For Greece, the quantity and quality of services and benefits provided by the government may diminish. A different approach to solving the problems of Greece and Kansas is necessary. Austerity has not helped them, only pushing them further into economic trouble. In both countries they need to raise taxes and cut back only on programs that are unnecessary. They should also try and increase spending which in turn will stimulate the economy creating more jobs and more tax funds.
ReplyDeleteWhen speaking of the economical policy of austerity both John Hanna and Paul Krugman agree on whether or not it is beneficial and it's the latter. They believe that it is maleficial because it does more bad than good. Krugman relates the inefficiency of austerity through Greece's dilemma and even addresses the fact of how a huge deficit was formed and now they are being forced to use austerity, and it is doing no justice towards them or their economical well being.
ReplyDeleteHanna, on the other hand, describes austerity through a more local bifocular lense. He lends to the fact that there are small benefits such as the government noticeably spending less but also the major drawback of how a lot of important areas, like education and infrastructure, are now being overlooked in terms of funding.
The advantage of austerity is the fact that it is helpful to paying off debts. The disadvantage is that it causes huge rifts in government spending to beneficial programs like in Kansas's case towards education and infrastructure. My approach towards helping the two out would be to instead of cut back spending on things that the people that inhabit the regions actually need, to cut back on programs that aren't as necessary for the well being of most people. They need to be willing to do things that will increase the flow of money back through their economies to remedy the loss of jobs and severely lowered GDPs.
Krugman and Hanna share similar viewpoints on austerity and how government measures how over spending can negatively affect the economy. Krugman's view, Greece is currently having difficulties with Germany based on debt management. The debt that Greece owes Germany is making Germany dictate that Greece should remain on austerity policies until the debt is completely paid off. Hanna's view is that Kansas is planning on cutting education and infrastructure which can and will cause the deficit to be paid off.
ReplyDeleteAdvantages is how borrowing from countries can pay off debts through austerity policies and the government will cut back on spending that is either excessive or unnecessary. In Kansas’ situation, the governor plans to close the deficit through practices that can affect the population. For Greece’s situation, the country can pay off their debts through the austerity practices. However, the major disadvantage to austerity is the lack of public investment on public projects, such as school education, infrastructure, etc. Kansas' governor proposed to cut spending on public schools and state universities by $45 million.
A different method to solving the Kansas and Greece difficulties is to keep important ones such as education and infrastructure. These two public programs are necessary to benefit society in the near and upcoming future. Austerity policies is in the direction that will cause further negative impacts for the countries and states.