Friday, April 26, 2013
Former Bush Advisor on Austerity
http://huff.to/15Mzfn2. Due 29 April 2013. What policies did Mankiw recommend that are now under great scrutiny? What are his excuses? What policies would YOU recommend to solve the problem?
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In the light of the recent debunking of the Reinhart-Rogoff austerity paper, which has been used to implement austerity measurers across the world, Mankiw still holds strong on the belief that austerity is right, and will work. And what is his reason for still backing Reinhart and Rogoff? Statistical evidenced? Non-bias policy papers? Nope, just the fact that he has a "feeling" that austerity is just the right choice. I would impliment the complete opposite of austerity. This is not the time to be cutting back from the people who need the assitance the most. The veterans, the children, the lower class, and countless other disenfranchized people are not the ones who should be suffering from the mistakes of some Harvard economists and evil-incarnated bankers. We should be placing measures to help those who need it the most, to boost the middle class, and start cutting the away from the military budget that incompasses a whopping 54% of the US budget.
ReplyDeleteMankiw defended the ideas of Reinhart and Rogoff, which were a collection of concepts and data that supported and qualified austerity as a sound economic measure. These measures, as well as austerity itself, have been proven wrong... multiple times. Yet, Mankiw excuses this by saying that it wasn't entirely their research that led to the downfall of certain economies, and he also says that these policies are "common sense," and that they "feel right." No sir, Mr.Mankiw, this is not so. I recommend that austerity just be completely dropped as a sound economic concept. Maybe in an economy where government spending isn't necessary they'll work, but then again that type of economy really doesn't exist. Government spending would need to be implemented, as well as tax reductions, for any expansionary fiscal policy to work.
ReplyDeleteGreg Mankiw dismisses the idea of Reinhart and Rogoff's papers as influential anyways. He also states the papers were not the only reason governments in Europe went on the austerity craze in the middle of a global depression. He agrees with austerity and makes excuses for it. I believe we shouldn't be using austerity. Instead we should be helping our middle class to boost up the worldly economy.
ReplyDeleteJaime Caldaro
ReplyDeleteMankiw defends that Austerity seems like a good idea to Europeans and that their research has seemingly supported the idea, but in fact it falls short. I believe he is being too tactful in his approach, because austerity is the exact opposite of expansionary fiscal policy. These European countries are implementing contractionary fiscal policy during times of recession which is creating a bigger hole. Government spending needs to increased and taxes reduced.
Mankiw says that Austerity is a good plan for Europeans and that he can back that up with his research but it doesn't defend it completely. He doesn't agree with Rogoff and Reinhart's theory's and also doesn't agree that they are influential ideas. Mankiw also likes fiscal policy
ReplyDeleteMankiw basically persuades that the idea of austerity is a good by telling us that there other reasons for blame...He even adds in the excuse that everyone makes mistakes. I believe that we shouldn’t make our decisions on “feeling” because it just “feels” right. Since this whole austerity isn’t working, I think we should think of another strategy instead of waiting for something to happen.
ReplyDeleteMankiw continues to back Austerity and Reinhart/Rogoff's work because he doesn't want to admit that he is wrong. He tries to play it off with stating that Reinhart and Roloff's papers were not influential, when indeed they were. Austerity has been proven wrong, and in order to reverse the downward spiral of many EU countries, expansionary fiscal policy needs to be implemented.
ReplyDeleteMankiw recommends the policy of austerity, claiming and backing Reinhart/Rogoff's work. Mankiw does this because he is afraid of admitting he's wrong and has a feeling that it is the right thing to do. Austerity has been proven wrong countless times which is why implementing the opposite of it is the smarter choice. By helping the middle class and those in need, we boost the economy.
ReplyDeleteMankiw keeps making excuses for Reinhart and Rogoff's ideas as a way to avoid admitting he is wrong. Other factors may have contributed to the economic detriment in Europe. However, that's not to say austerity works. Austerity has proven itself a failure all over the world, especially in Europe. Reinhart and Rogoff's policies have affected more people than you would think and happens to be very influential, as opposed to what Mankiw may think
ReplyDeleteThe initial problem with Mankiw’s “mistake” about austerity is that it was made off of a mere feeling, NOT off of statistical evidence (how economist of him!) His backing of austerity may seem like a short term solution to the current problems around the world, but in the long run it will be more harmful and may lead to an economic catastrophe. The problem with using austerity as a means of balancing the budget is that it is the opposite of the economic policy that ought to be implemented. Austerity will push a recession deeper and possibly put us into a depression. The policy that should be implemented is an expansionary fiscal policy that will increase spending and/or decrease taxes which most economists will agree with.
ReplyDeleteThe primary problem associated with Mankiw's "mistake" was it's impulsive nature. It was based off of feeling, and intuition, rather than true evidence. His backing of austerity may appear to be a solution for the short term, but it will eventually lead to economic catastrophe. The primary issue with austerity is that generally, it is the opposite of what truly needs to be done. Austerity will push a recession deeper, because during times of recession, increased spending is what will stimulate the economy to aid in recovery. Expansionary fiscal policy would be ideal in these situations, rather than contractionary. This policy increases spending, and decreases taxes.
ReplyDeleteThe policies he once recommended that now face criticism are that austerity works, as he agrees with Reinhart and Rogoff, despite the fact that they have been proven wrong. His excuses are that he still believes it’s the right path because he feels that way and that the research wasn’t completely wrong. I would recommend not following austerity because it clearly doesn’t work and makes the economy worse for all except a select few. That way the average American or citizen doesn’t suffer while rich greedy banker and politicians make the money.
ReplyDeleteMankiw's mistake was that it was based off of feeling rather than evidence. His theory using austerity looks to solve the problem in the short term, but it will eventually lead to economic problems. The concern with using austerity is that it is the opposite of what should be done. Austerity will make the recession worse. During a recession, increased spending will stimulate the economy and will help everything recover. Expansionary fiscal policy would be perfect for this situation. Contractionary should not be used. That would increase spending and decreases taxes.
ReplyDeleteMankiw is under great scrutiny for his support in the implementing of austerity and for his concurrence with Reinhart and Rogoff. His reasoning is simply that it feels right and that they are common sense. I would beg to differ, austerity is not common sense. I think that it should be completely disregarded as a valid economic policy/solution. I think the total opposite of austerity should be implemented. Assistance should be provided for all those who are in need. This could be made possible with an expansionary fiscal policy.
ReplyDeleteMankiw recommends the policy of austerity, claiming and backing Reinhart/Rogoff's work. Mankiw does this because he is afraid of admitting he's wrong and has a feeling that it is the right thing to do. Austerity has been proven wrong countless times which is why implementing the opposite of it is the smarter choice. By helping the middle class and those in need, we boost the economy.
ReplyDelete-Jacob Hochman