Note that “cut” in politics doesn’t mean what you seem to think it means. Here in the United States, we “cut” the Medicare budget by over $200B over the next five years. Definition of “cut”? Uhm, we allocated less money to it than had originally been predicted as being needed for Medicare over that period of time (thanks to changes in the privatized portion of Medicare that cuts out the extra subsidy for that program)… but still more money than was spent last year on Medicare. And that, you poor gullible fool, is what a politician means by a “cut”.

– Badtux the “You probably believe in the tooth fairy too, huh?” Penguin

It is utterly baffling to me that you continue to insist upon living in a universe where up is down, unicorns are real, and an increase in government spending is “austerity”, rather than in *this* universe. So it goes.

– Badtux the Snarky Penguin

Sorry, since my original post was referring to 1930’s history, I assumed that David’s question was too.

Never mind, though. The faces change, but the script stays the same.

PJ, the answer is in the original post. As a former Chancellor of the Exchequer [British Treasury Secretary] Gordon Brown sorted things out, punishing the banksters and stimulating the economy. In addition, though reduced in recent years, Britain still has a much stronger social safety net than the US, so the net effect of lay-offs is nowhere near as bad on the demand side as in the US.

Brown’s stimulus wasn’t as large as it should have been for a rapid recovery, which is why the current austerity moves are going to drive Britain back into recession.

Can’t really argue this because I don’t know enough European economic/political history. However…

First, I don’t know if what you claim is true or not — you’ ve given no time frame, no data, and haven’t said whether you are defining recovery using unemployment (my metric) or something less cogent like stock prices.

Second, off the top of my head, I’m guessing that military spending in Britain ramped up well ahead of the U.S., given the political situation. In the U.S., certainly, it was the massive government spending, higher progrssive taxation and direct control of pricing, allocation, etc. necessitated by the war effort that finally ended the Depression. Again, trying to have their cake, right-wingers argue that it was the war rather than the New Deal that did the trick, as if that fact didn’t also completely invalidate conservative ideology. But hey, war is always OK by the wingers. Lot’s of money to be made in a war, you know.

Australia is the only major Western economy to have avoided recession, defined as two successive quarters of negative growth. GDP accelerated in the second quarter, notching up a rise of 0.6%, three times higher than expected. This follows a 0.4% increase between January and March, taking growth out of negative territory after just one quarter.

What the commentators said:

A key reason for Australia’s resilience is the government stimulus package focusing on cash hand-outs for consumers and infrastructure spending. As a result, Australia is heading for a record budget deficit, said Lex in the FT; but “Canberra deserves credit for running a surplus in the first place”.

Australia has also been shielded by a “non-dysfunctional banking system” that steered clear of risk.

Most important of all are its trading links with China. “As China’s preferred supplier of rocks and crops” it has “piggybacked off a stimulus nine times larger than its own”. With inflation unlikely to stay below target for long as the economy strengthens, said Capital Economics, Australia could hike rates by the end of the year.

How did Australia escape recession?

The Aus Gov allocated a huge (for us) stimulus package (like the USA). unlike the USA, we put the tax payers money where it would do some good. The ROI on the money used to increase public spending, infrastructure project (increasing employment) and international trade was up to 9 times! The only people in the USA that got a return on the taxpayer funded stimulus were the same people who created the problem and want austerity in Gov! Why? because they are totally selfish greedy a*holes who want all the money for themselves! And that goes for every moron who thinks Austerity is a good thing! It is, for them… bad for everyone else! Oh, and if a person is pushing for austerity measures, and isn’t even within a mile of the gravy train (where the money will go), they are even bigger morons!

One other thing we did (not mentioned in the above) was our Reserve Bank saw what was coming in 2007 and raised interest rates several times before 2009. This gave them plenty of room when the global economy started meltdown to then quickly drop interest rates significantly and eased the burden on homeowners, and encouraged buyers. And it worked. 🙂

Things are currently pretty rosy here! Everyone else who didn’t spend, or spent in the wrong places, is feeling pretty sad and poor right now. 🙂

Hell, during 2009, thousands of Brit’s came to Aus to get job’s! Was one of the few places in the World they could get a job!

From a Press release:

Moving to Australia to escape the doom of a UK recession.

As the British economy hits rock bottom, thousands of skilled workers are looking abroad to start up a brighter, more stable life in a different economy. Australia has been a favourite destination for British skilled migrants but is it the answer?

FOR IMMEDIATE RELEASE
PRLog (Press Release) – Mar 05, 2009 – There has been much debate as to whether Senator Chris Evans (Minister for Immigration and Citizenship) would lower the record rates of immigration to Australia in the 2009-10 Budget in response to his country’s prospective financial troubles.

Evans has decided to keep this year’s record 133,000 skilled visas as a ceiling until the Government assesses the country’s economic situation in time for the mid-year Budget.

This means that Australia still has plenty of places for skilled workers to move to Australia, and you could be joining the thirty-odd thousand other Britons moving to Australia permanently every year through the Australian migration program.

Now we all know Australia has a better climate, nicer beaches, and the promise of a more comfortable, outdoor lifestyle than the UK, but, in this economic climate would skilled workers actually be better off by moving from the UK to Australia?

Getting Down Under Webmaster and Owner, Mark Butterworth said “The UK weather is often one of the countries biggest draw backs with many UK citizens dreaming of a new life in the sun. One thing that many people fail to understand is that it’s not all about the sunshine.

Once people arrive in Australia there will still be a need to work to support this new lifestyle.

Our research goes a little way towards helping people in the UK understand the real differences between life in Australia versus life in the UK.

A fool and his money are soon parted.
— Thomas Tusser (1557)

http://sdw.ecb.europa.eu/search.do?type=free&q=germany

That’s the ECB. Check out the table on total government debt. In 2008 Germany went on a spending spree in response to the recession, and the debt line takes an abrupt jog upwards. Some “austerity”. Also check out the deficit table. Germany’s deficit was basically 0 in 2007, and in 2009 was close to 4% of GDP. Again, hardly “austerity”. Finally, check out private vs. government consumption for the first two quarters of this year. Private consumption fell at an annualized rate of about 0.5%. Public consumption rose at an annualized rate of about 3.5%. Again, some “austerity”.

Oh wait, I forget, these are facts in THIS universe, and thus don’t exist in Mr. Duff”s universe, where unicorns are real and Germany apparently is located somewhere to the west of the UK and is called “Ireland”.

– Badtux the Snarky Penguin

– Badtux the Snarky Penguin

– Badtux the Snarky Penguin

Also, if you think the usual Chicago-school Econ101 boilerplate is a description of the real world, then you are an idiot.