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How National Belt-Tightening Goes Awry - Economic View
Keywords:
Shiller says policy is captured and communicated by metaphors, the most effective being belt tightening for a family. However what works for a family does not work for a country in the same way, especially if not accompanied by other measures and implemented in a strict manner without looking at the real situation. Better suggests Shiller, and more real is the metaphor of "winter on the family farm," where people work to do other chores than planting and harvesting, because a lot of other things need to be done and this is a good time to do it. This would include cleaning up the place, fixing the farm and the barn, fixing machinery, building fences. The farm's members pay a tax in terms of donated labor which goes to do all the work needed and helps the farm's productiveness as the weather changes. Similiarly the Salant-Paul Samuelson balanced budget theorem from the FDR days shows an increase in national output by the amount of a tax, such as the one proposed in France by president Hollande; that would then be invested in hiring more teachers (the labor) and investing in education infrastructure.
Robert Shiller and "winter on the family farm" as a metaphor in tough economic times instead of "tightening the family belt"
01/27/2009
Shiller cites the "balanced budget theorem" of Salant and the economist Paul Samuelson during the FDR period. This showed that with taxes and expenditures going up during tough economic times the higher output leads to national income increasing by the amount of the tax. French president Hollande's plan to hire 60,000 teachers is of this kind, says shiller, because the higher taxes on incomes over 1 million euros supporting the hiring would increase national income by that amount.
Grouped Articles
Wall Street Journal 05/29/2013
Fear of a Double Dip Could Cause One
New York Times 05/14/2010
Robert Shiller: A Skeptic and a Nobel Winner
New York Times 10/19/2013
How to Fix the Economy: An Expert Panel
BusinessWeek 09/16/2010
France's Hollande Replaces Prime Minister Ayrault with Manuel Valls
Wall Street Journal 04/01/2014
How National Belt-Tightening Goes Awry - Economic View
New York Times 05/19/2012
Sarkozy and Hollande economic policy measures and France's economy 2012-2014
04/17/2012
Grouped Articles
France Goes Against the Euro-Zone Flow
Wall Street Journal 04/18/2013
Wall Street Journal 05/29/2013
A Proud Nation Ponders How to Halt Its Slow Decline
New York Times 08/24/2013
France Says It Will Miss Budget Deficit Targets
Wall Street Journal 09/12/2013
German Optimism Depends On Spanish Deficits
Wall Street Journal 09/25/2013
French Cabinet Is Dissolved, a Victim of Austerity Battles
New York Times 08/25/2014
The new administration of Francois Hollande in France
05/05/2012
Finance Minister Pierre Muscovici, was European Affairs minister in 1997-2002, Foreign Minister is Laurent Fabius, a former prime minister in the 1980's, and Michel Sapin is Minister for Employment, Labor and Social Dialogue. This gives Hollande an experienced team to implement his program and achieve a reorientation of EU policies towards growth.
Grouped Articles
Year Into Hollande Presidency, âa Sense of Driftâ
New York Times 05/04/2013
A Proud Nation Ponders How to Halt Its Slow Decline
New York Times 08/24/2013
For France, U.S. delay on Syria fuels doubts - The Washington Post
Washington Post 09/07/2013
France Tries to Tempt In More Foreign Investment
New York Times 02/17/2014
In Race to French Presidency, Hollande Sets His Own Pace
New York Times 05/05/2012
France's Hollande Replaces Prime Minister Ayrault with Manuel Valls
Wall Street Journal 04/01/2014
Italy, Spain and austerity measures- 2011-2013
08/08/2011
Analysts point to the austerity measures adopted by Italy and Spain much earlier than other countries in the eurozone. The risk now is cutting into muscle as growth for 2011 is expected to be below 1% in both countries. Italy say analysts is actually in surplus when the interest on debt is excluded.
Grouped Articles
Italy Urged to Resist a Relapse in Spending
Wall Street Journal 05/03/2013
Still Sputtering, Spain Turns Away From Cuts
Wall Street Journal 05/12/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
New York Times 11/03/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
European Finance Ministers Support Investment Program
New York Times 09/14/2014
Italy's 2013 budget and deficits
05/14/2010
The impact on economic growth of austerity measures.
Grouped Articles
Italy Urged to Resist a Relapse in Spending
Wall Street Journal 05/03/2013
Europe to Vote on Tougher Rules for Currency
New York Times 09/27/2011
Wall Street Journal 05/14/2010
Euro Zone Deficit Hits Target for First Time Since 2008
New York Times 04/23/2014
EU Won’t Reject French, Italian Budgets
Wall Street Journal 10/28/2014
European Union Blinks in Budget Battle With Italy and France
New York Times 10/28/2014
The twin problems of lack of growth under austerity plans and overvalued currencies of Italy, Greece, Spain and Portugal
06/24/2011
The twin problems of lack of growth and overvalued currencies under the solutions of austerity plans without debt reduction and a single euro currency create impossible odds for a resolution of the eurozone financial crisis. Germany's insistence on tough austerity measures, European banks delaying restructuring of bad loans similar to the U.S. Brady plan, failure of politicians in Italy and Greece to take early action, and small steps by policymakers, are compounding the effects of the eurozone crisis.
Grouped Articles
German Election Overturns Political Order
Wall Street Journal 09/23/2013
New York Times 11/03/2013
Germany's Surplus Isn't the Problem
Wall Street Journal 11/11/2013
The 'Silent Austerity' in Banking
Wall Street Journal 01/21/2014
Italy Central Banker Is Open to 'Bad Bank'
Wall Street Journal 02/10/2014
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
The 2010 austerity budget and the European financial crisis affecting Spain.
05/13/2010
The contagion effect affecting Spain after Greece and Portugal similar to the manner in which the Asian financial crisis spread during a prior decade.
Grouped Articles
New Spanish Budget Free of Austerity Measures
New York Times 09/27/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
Spain is simply shifting the problem
Wall Street Journal 05/14/2010
Amid Europe's challenges, citizens face lifestyle shifts
Wall Street Journal 05/14/2010
French Cracks Are Showing in Euro-Zone Core
Wall Street Journal 05/13/2010
Wall Street Journal 05/13/2010
The IMF comes out on Spain's side in 2012 saying deficit reduction should have taken into account the weaker economic outlook
09/27/2011
The IMF in April 2012 says cuts in Spain may be too severe and cautioned that austerity measures could push Europe into recession.
Grouped Articles
Still Sputtering, Spain Turns Away From Cuts
Wall Street Journal 05/12/2013
Europe to Vote on Tougher Rules for Currency
New York Times 09/27/2011
German Optimism Depends On Spanish Deficits
Wall Street Journal 09/25/2013
The 'Silent Austerity' in Banking
Wall Street Journal 01/21/2014
Euro Zone Deficit Hits Target for First Time Since 2008
New York Times 04/23/2014
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
Poverty and hardship in Ireland after austerity measures by the government in 2010
01/04/2009
Grouped Articles
The New Generation Leaving Ireland
BusinessWeek 02/11/2010
Ireland Faces Seventh Year of Austerity
Wall Street Journal 10/16/2013
New York Times 04/03/2009
Ireland Faces Battle Over Europe Stability Treaty
New York Times 05/01/2012
Irish Cutbacks Pile It on for 'New Poor'
Wall Street Journal 11/27/2010
Ireland's new government: Enda the party
Economist 03/05/2011
Krugman and other experts on the decision of the government of Ireland to guarantee all the debt of its runaway banks.
08/31/2010
This decision has burdened the Irish people with the debt that banks incurred in a burst of speculative frenzy in real estate. This was possible as bankers were working together with politicians and developers. German and British banks made poor lending decisions and loaned money freely to Irish banks. Banks should share in these losses but the decision of the Irish government has put the burden on the people of Ireland, with a third year of severe austerity cuts in the face of a 14% unemployment rate. The investigation into Anglo Irish Bank.
Grouped Articles
In Ireland, Hope of Retroactive Relief
Wall Street Journal 06/29/2012
Support of Anglo Irish Bank Strains Ireland
New York Times 08/31/2010
New York Times 11/25/2010
The Road to Economic Crisis Is Paved With Euros
New York Times 01/12/2011
Europe Needs to Apportion Pain
Wall Street Journal 03/17/2011
Tests Show Irish Banks Still Ailing
New York Times 03/30/2011
Strikes and labor protest in Britain over austerity measures 2011-2012
08/14/2010
Grouped Articles
U.K.'s Labour Party Moves Back Toward Socialist Ideas
Wall Street Journal 09/25/2013
U.K. Politicians Vie to Address Fall in Living Standards
Wall Street Journal 11/18/2013
Radical Britain: The unlikely revolutionary
Economist 08/14/2010
Universities in Britain Brace for Cuts in Subsidies
New York Times 10/15/2010
Britain Details Radical Spending Cuts, Citing Debt
New York Times 10/20/2010
New York Times 10/21/2010
The IMF's changing views on the value of austerity measures and the "German hypothesis"
04/05/2009
The IMF's economic models suggest that it would take 5 years for the breakeven point at which the economic benefits of austerity measures start exceeding the costs of the measures in declining GDP and higher unemployment. The German view is that this can occur in the short term.
Grouped Articles
Policy âTroikaâ for Europe Financial Woes at Odds
New York Times 06/07/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
Known for Tight Spending, I.M.F. May Have to Loosen Reins After G-20 Windfall
New York Times 04/05/2009
Germany Considers Remedies for Slowing Growth
Wall Street Journal 10/08/2014
Merkel Hints at Economic Policy Shift in Germany
New York Times 10/09/2014
How Righteousness Killed the World Economy
New York Times 10/12/2014
Frances's president Hollande's plan for investment in education and Shiller's metaphor of "winter on the family farm"
05/19/2012
Shiller evaluates the Hollande plan using the Salant-Samuelson balanced budget theorem and shows that it would increase national income by the amount of the tax on higher incomes. It would create a more productive economy with investment of the type that occurs in winter on the family farm.
Grouped Articles
New York Times 04/13/2013
Wall Street Journal 05/29/2013
A Proud Nation Ponders How to Halt Its Slow Decline
New York Times 08/24/2013
EU Won’t Reject French, Italian Budgets
Wall Street Journal 10/28/2014
European Union Blinks in Budget Battle With Italy and France
New York Times 10/28/2014
How National Belt-Tightening Goes Awry - Economic View
New York Times 05/19/2012
Francois Hollande of the Socialist Party as President of France
02/13/2012
Grouped Articles
Year Into Hollande Presidency, âa Sense of Driftâ
New York Times 05/04/2013
French Economy Minister, Arnaud Montebourg, Was Often Out of Step With President
New York Times 08/25/2014
French Candidate Hollande Assails European Policy on Greece
New York Times 02/13/2012
French Front-Runner Pledges 75% Tax Bracket
Wall Street Journal 02/29/2012
Ireland becomes a test for E.U. crisis remedy - The Washington Post
Washington Post 03/01/2012
Sarkozy Challenger Lucks Into Election Bid
Wall Street Journal 03/14/2012
Wage flexibility by labor unions in France as part of an effort to improve competitiveness and reduce unemployment
10/28/2006
Sarkozy, Hollande and the unions are in agreement on adopting some aspects of what Germany did to reduce high unemployment in the last decade- adjusting wages and benefits in recessionary periods to avert layoffs. The German "kurzarbeit" program is more elaborate and France has to make more progress to adopt that type of arrangement, but the direction is clear and has popular support in France in 2012-2013.
Grouped Articles
Wall Street Journal 05/29/2013
The Next First (and Only) 100 Days
New York Times 12/10/2011
A Proud Nation Ponders How to Halt Its Slow Decline
New York Times 08/24/2013
Americanized Labor Policy Is Spreading in Europe
New York Times 12/03/2013
Bayer: Pressure on Prices Has Bad Side Effects
Wall Street Journal 02/07/2012
Departing EADS Chief Urges Europe to Recommit to Industry
New York Times 04/12/2012
Italy's austerity measures- 2011-2013
06/30/2011
Grouped Articles
Italy Urged to Resist a Relapse in Spending
Wall Street Journal 05/03/2013
How Righteousness Killed the World Economy
New York Times 10/12/2014
EU Won’t Reject French, Italian Budgets
Wall Street Journal 10/28/2014
New York Times 11/30/2014
Italian Government Advances Austerity Plan
New York Times 06/30/2011
Wall Street Journal 07/12/2011
The focus on competitiveness by economists, credit ratings agencies, and European leaders as austerity measures alone won't work
02/05/2011
Mario Monti focusses on the need for investing in the economy in an interview with German newspaper Die Welt during a January 2011 visit to Berlin. S&P economists and Nobel winner Stiglitz also emphasize this after a downgrade of France's credit rating- the need for improved competitiveness for the economies of France, Spain Portugal and Italy.
Grouped Articles
New York Times 09/25/2011
Wall Street Journal 05/29/2013
The Next First (and Only) 100 Days
New York Times 12/10/2011
A Proud Nation Ponders How to Halt Its Slow Decline
New York Times 08/24/2013
After a Recession in Portugal, the Tiny Green Fruits of Success
New York Times 08/28/2013
France Says It Will Miss Budget Deficit Targets
Wall Street Journal 09/12/2013
Protests against austerity measures in Spain
05/13/2012
Grouped Articles
Still Sputtering, Spain Turns Away From Cuts
Wall Street Journal 05/12/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
Tens of Thousands Protest Austerity in Spain
New York Times 05/13/2012
World leaders agree on more spending to boost Europe’s economy - The Washington Post
Washington Post 05/20/2012
Group of 8 Leaders Confront German Focus on Austerity
New York Times 05/19/2012
How National Belt-Tightening Goes Awry - Economic View
New York Times 05/19/2012
The 2012 austerity budget in Spain under prime minister Mariano Rajoy
03/30/2012
Grouped Articles
Still Sputtering, Spain Turns Away From Cuts
Wall Street Journal 05/12/2013
German Election Overturns Political Order
Wall Street Journal 09/23/2013
Spain Emerges From Recession but Sees More Austerity Ahead
Wall Street Journal 09/23/2013
New Spanish Budget Free of Austerity Measures
New York Times 09/27/2013
Saying No to Austerity, Spain Unveils Tax Cuts
New York Times 06/20/2014
How Righteousness Killed the World Economy
New York Times 10/12/2014
Portugal's austerity measures and the financial crisis 2010-2015
09/27/2010
Collapse of the government in Portugal in 2011, after failing to win support for further austerity measures.
Grouped Articles
Wall Street Journal 05/03/2013
Portugal Returns to Bond Market
Wall Street Journal 05/08/2013
Portugal Plans Cuts in Spending
Wall Street Journal 05/30/2013
Portugal's Government Thrust Into Turmoil
Wall Street Journal 07/03/2013
Lisbon Cabinet Shuffle Buoys Junior Coalition Party Leader
Wall Street Journal 07/08/2013
Portugalâs President Calls for Early Elections
New York Times 07/11/2013
Ireland's austerity measures and banking crisis.
04/03/2009
Grouped Articles
In Ireland, Hope of Retroactive Relief
Wall Street Journal 06/29/2012
Ireland Faces Seventh Year of Austerity
Wall Street Journal 10/16/2013
Hardships Linger for a Mending Ireland
New York Times 12/11/2013
New York Times 04/03/2009
Support of Anglo Irish Bank Strains Ireland
New York Times 08/31/2010
Ireland Faces Battle Over Europe Stability Treaty
New York Times 05/01/2012
Britain's perilous path with austerity cuts, inflation and lower economic growth- 2011-2015
06/22/2010
Grouped Articles
The economy: On a wing and a credit card
Economist 07/08/2013
U.K. Moves To Tackle Income Squeeze
Wall Street Journal 08/20/2013
The Curious Case of Britain's Economic Recovery
Wall Street Journal 10/21/2013
U.K. Politicians Vie to Address Fall in Living Standards
Wall Street Journal 11/18/2013
U.K. Government Prepares For Deep Budget Cuts
Wall Street Journal 06/22/2010
British Towns and Institutions Reel From First Austerity Cuts
New York Times 08/09/2010
The impact of austerity measures on various parts of Britain.
07/03/2010
Impact of the Cameron government spending cuts across the UK.
Grouped Articles
U.K. Politicians Vie to Address Fall in Living Standards
Wall Street Journal 11/18/2013
British Towns and Institutions Reel From First Austerity Cuts
New York Times 08/09/2010
Radical Britain: The unlikely revolutionary
Economist 08/14/2010
As the Working Poor Become More Common in Britain, So Does Hunger
New York Times 01/02/2014
U-Turn in the U.K.: Big Spending Cuts
Wall Street Journal 10/14/2010
Jack Monroe Has Become Britain’s Austerity Celebrity
New York Times 01/14/2014
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