Is Austerity self-defeating?

@Burnley123 When things get tight in a household spending still takes place. The smart way is to cut spending on things that are not that important, until things improve. Governments are great in wasting money.

@GunSmoke9 You completely misunderstood my point.

A household needs to cut spending when in debt but a national economy is not a household. Its the Paradox of thrift.

Government money spent goes back into the economy and the private sector (like us healthcare) is often less efficient than the state.

@Burnley123 A government needs to cut spending when in debt. Government needs to take it from the people in order to spend it. The private sector does a better job then the government. When the government subsidies anything the cost shoots up. Governments have to eliminate waste, which is plenty.

@GunSmoke9 That isn't supported by the evidence.

The market can be more efficient but not necessarily. The us healthcare system costs twice as much as the British one. Insurance companies add an unprecedented layer of bureaucracy and there is incentive for drug companies to push the costs up.

As for the idea that Governments need to cut during recession; look at New Deal America. Or look at the austerity in Greece and how that has made things worse on an economic, as well as a human level.

@Burnley123 What isn't supported by evidence? The markets are almost always more effective than government. With the free market you get competition, accountability, not with the government. In the real world bad workers get fired, bad government workers remain, or transfer to another office. Healthcare, college, ect. have seen costs rise because of government.

@GunSmoke9 Evidence? Examples of that happening, not vague cliche statements which don't ring true. Your real world is a right wing fantasy.

@Burnley123 If it helps here peeps, don't forget that local authorities are amongst those who are responsible for determining and progressing investment projects, infrastructure which will not only provide fiscal stimulation but improve quality of life. That's always assuming that they are organised or not too constrained (fine balance) in effecting such multi-million £/$ projects properly. If it were left just to private initiatives, quality is often shaved to increase 'the bottom line'.

@Burnley123 What doesn't ring true? That government waste money? That competition lowers cost? one just has to look around. That when the government subsidies anything cost rise? Your world is a nightmare. Government taking care of us from cradle to grave, and only the rich will pay.

@GunSmoke9 Give EXAMPLES please.

@Burnley123 Examples of government waste: Hurricane Sandy, politicians across the country were paddling the bill for their own pet projects. Nothing to do with the hurricane. 50 million to build a three mile street car in Arizona. Arizona wants it, let them pay. 850 thousand to set up a tv cricket league in Afghanistan. Just a small example.

@Burnley123 Do you really need examples of how competition lowers cost? That's basic economics. Same products made by different companies with different prices to bring in consumers. Don't we shop around for the best prices?

@GunSmoke9 Again this is vague stuff. You need to compare things where the private sector and public sector have both provided a service.

My example was comparing the US and UK healthcare systems. I could also compare our own private railways with the more efficient public systems in other countries.

@GunSmoke9 Isn't competition (or 'shopping around for best prices') more complex than this though - competition can be just a race to the bottom in terms of quality unless the output is diligently monitored and rigorously enforced, sometimes requiring legal action (and therefore extra costs). Commercial enterprises are just that - they need to produce an acceptable 'bottom line'. They can do this by 'cheating' on quality, on the basis that they will probably get away with it. I do not think therefore you can merely rely on private industry to come up with the goods.

@Valentine When companies cheat they lose business, money. Why would they do that? There is oversight, regulations on businesses. There are legal options that are available to those that need them. What goods have the government come up with?

@Burnley123 I know it's vague, just wanted to point out some of the waste in government. I don't know how healthcare is in the UK, but here in the states obamacare made things worst. I believe the way to fix it is through the free market. People need want choice, not one size fits all. Here it's not about healthcare but about power, control.

@GunSmoke9 The costs of US healthcare was increasing anyway under the free market stystem. Again, even before Obamocare, the US system cost double and it was free market compared with a state model.

@Burnley123 Healthcare hasn't really been a free market in a long time. Cost have been going up even more under Obamacare. Subsidizing insurance companies, forcing people to buy insurance that they don't need or want will not fix things but make it worse.

@GunSmoke9 OK so why no go single payer? Compromises which have the Government paying the healthcare industry are inefficient so why not do it properly?

@Burnley123 You are really funny Burnley, "government paying the healthcare industry." When will people who live in illusion grasp reality. The government pays for nothing, it is a huge monstrosity which taxes people and uses their money to pay for things. The government abuses its power on a daily basis. People who believe the government pays for stuff are disconnected from logic and reality. But then again if you keep repeating lies, tyranny becomes an accepted norm.

@Burnley123 So the government becomes the insurer? High cost, ration care. Why don't we push for more of a free market solution.

@GunSmoke9
"When companies cheat they lose business, money. Why would they do that?"
Because they think they can 'get away with it'. Their profit motive is innately designed so that they take commercial decisions to press so hard up to the contractually designed and agreed quality requirement, and usually below it. I see this [i]daily[/i] in PFI contracts where the Builder was required to build to a specification and they prove adept in concealing their profit driven 'shortcuts' until the wall eventually walls down nearly killing children, or the hospital/school building is an undeniable fire hazard because of shoddy and concealed workmanship (fire compartmentation etc being the unfortunate recent example). Commercial operations are just as subject to mistakes, poor workmanship, and costly weather delays as public organisations - they will take a poor quality, cheaper route to compensate and protect their 'bottom line'. They know and work on the basis that they can get these shortcomings past building inspectors and project managers etc until it becomes too much of a hassle to attempt to put it right - the only way being to engage costly legal dispute. The usual winner is of course the eventual fat-cat lawyer.

"There is oversight, regulations on businesses. There are legal options that are available to those that need them."
True. But expensive. And the legal system can be an expensive lottery - and not just in terms of £/$ but H/M/S - the commercial operation will factor in that the Client will not have the resource or appetite to pursue a just claim. There will inevitably be staff turnover, poor handovers, new politically driven objectives which pressure older unresolved issues to be backburnered. And therefore quality and unfortunately sometimes safety is designed to suffer, often compromised to an unacceptable degree.

"What goods have the government come up with?"
A good example would be the vast number of Private Finance Initiatives (PFIs) - projects where a significant publicly required utility (eg. schools, hospitals, leisure centres) cannot be financed upfront by the public purse, so, similar to the would-be home owner, they take out an FBM (f***ing big mortgage) on the asset funded by Senior Lender banks. Ok, this is 'local' government, but they work as part of the overall government function.

@therighttothink50
"The government pays for nothing, it is a huge monstrosity which taxes people and uses their money to pay for things."
True - governments do 'tax'. But society has chosen this path - to pool resources on as fair a basis as it can for the collective good of the community it represents. It then places responsibility for this into the hands of public bodies which are tasked to provide the required goods/services. Public accountability is clearly a requisite here to ensure diligence and productivity. Doesn't always happen, I concede - they are as much a part of the real world as commercial organisations and f*** up big-time too. But, if we left infrastructure decisions to commercial businesses, they would 'follow the money', and we would have just a wonderful world of lush green exclusive golf clubs and even bigger-fancy yachts.
"The government abuses its power on a daily basis." Who can argue with this - after all government is run by politicians! There is no easy answer here.

@Valentine Fine you came up with some examples. I can find plenty of examples of when government is too involved, things get worst. I'll stick to my beliefs that competition is good for the economy. It lowers cost, creates jobs. How long do you think Ford, Chrysler, Apple, ect. would stay in business if they put out a lousy product to save money? Cutting corners will cost them money.