#deficit-spending

[ilovelondonontario-blog]

[abigailgamble]

word adventures: austerity, Keynesian economics and the wonderful world of Wikipedia

I listen to BBC World Financial Report almost every day. The first thing I do when I get home is turn on radio podcasts that play in the background as I tidy or cook dinner. I don't listen as carefully to some stories as others, and sometimes get distracted by other thought processes and things I'm doing. But I feel like I get the general gist of what's going on in the report. What is not explained as often as I'd like though are some of the terms they use when discussing the world economic situation (I say those last three words in a deep, serious and booming voice in my head). 

Austerity: Before looking it up, the things I know about austerity in the economic context are mainly related to the idea of "austerity measures." These are economic polices adopted by governments that are supposed to manage and hopefully decrease the effects of the financial crisis in _____ (fill in the blank, country or city). These policies are often things like spending cuts on things where money would generally be spent, higher taxes, pension cuts, job cuts etc. Basically they are meant to do whatever is necessary, no matter how painful, to lower spending and reduce debt. 

Generally, people seem to hate austerity measures. Cause people really like consumption. And, while they understand that something needs to be done to help the economy, they're not cool with being the ones that must pay the price. The BBC informed me today that the austerity cuts to public sector pensions in Britain are why people in that sector, from train drivers to postmen, are on strike. Meanwhile, here in Toronto, approximately 1200 city jobs were cut today as part of Rob Ford's proposed austerity budget. I'm going to assume people aren't going to be happy about this either. 

I always reach a point where I'm no longer ok with half understanding a word, so now I've decided to reach out to my trusty source, Wikipedia, for more information on this austerity concept. Austerity, says Wikipedia, is "a policy of deficit cutting, lower spending,  and a reduction in the amount of benefits and public services provided." Right, so its seems I was pretty much on track, definition-wise.

Apparently, austerity policies are often used to reduce deficit-spending. Upon clicking on the "deficit-spending" link to find out what this means, I learn that deficit spending is when a government, organization or person spends more money over a certain period of time than they bring in as income (i.e. everyone I know with a student loan). As it turns out, this a very controversial economic policy, with some people thinking that deficit spending is fine in one or two lean cycles, as long as surplus's are collected during boom times. The concept is derived from Keynesian economics. 

Upon clicking on the Keynesian economics link (seriously, what did people DO before the internet?) I learn it's a school of macroeconomic..dammit..[sidebar: macroeconomics is economics looking at a whole economy. The big picture essentially, of how national, regional and global economies structure themselves and behave]. So, back to Keynesian economics. It's a macroeconomics theory that suggests the best economic answer to crisis is when the public sector and government, work with (though it kinda seems more like control) the private sector to stimulate the economy by lowering interest rates and increasing government spending on infrastructure. The expected result is then supposed to be more increased income and spending, which theoretically will stimulate a consumption-based economy. 

I barely even remember now why I cared. I do want to go read more about economics though. So many cool ideas, so many Wikipedia links..

[jaybwilson-blog-blog]

Tax increases may seem penny-wise to some, but in reality they would be very pound-foolish.

[lukecarlos]

CNN: Florida First Primary, Good Idea

Having Florida or even Michigan go first on the Primary would more accurately reflect America at large and force politicians to discuss more issues of substance and concern to the largest number Americans, early in the Presidential election cycle. This thing where we have to surrender the battle on issues important to affluent rural, white concerns before we even nominate someone in either party, is expensive, undemocratic and just really bad policy over all.

Amplify’d from www.cnn.com

A Florida-first primary is a fantastic idea

The state of Florida has proposed shifting its primary into January, making Florida the first primary in the nation.

Other early primary states have protested ferociously. South Carolina's Republican Party chairman has demanded that Florida abandon its plans -- or be punished by having the 2012 Republican convention move from its currently planned site, Tampa Bay.

The current American primary schedule is not the work of the founding fathers. The schedule is the unintended consequence of a hodge-podge of habits and coincidences. But this unintended schedule has terrible real world consequences.

The US pays a huge subsidy to transform corn into motor fuel. Not only does the subsidy waste money, but it artificially drives up the price of food all over the planet. Many economic studies -- have cited ethanol production as the single most important driver of recent world food price increases.

Why does this ridiculous program exist? The short answer is: the Iowa caucuses. You want to be a major party nominee for president? You'd better convince yourself that ethanol is indispensable.

Florida looks a lot more like the America in which most Americans live.

Read more at www.cnn.com

 See this Amp at http://bit.ly/ePXWo4