Budget cuts hurt British economy – study — RT

As any first year economics student knows…

The British economy won’t begin to recover until 2014, as government’s cuts and the euro crisis slash demand which is a key driver for UK economy growth, is the conclusion of a study prepared by a leading UK think tank.

The National Institute of Economic and Social Research revised its forecast, saying the UK economy would shrink 0.5% this year, down from an initial estimate of zero growth.

“The major problem in the U.K. economy is a lack of demand, and the government can do things to boost demand,” Simon Kirby, the economist at the NIESR said.

Though the 2010 austerity program, which was extended for two years to 2017, was aimed to boost growth to 2.8% this year, the UK economy contracted by 0.7% in the second quarter of 2012, the report stressed.

Had the government postponed its austerity program by three years, the country’s economy could grow 1.2% this year and the output could grow 239 billion pounds between 2011 and 2021, the NIESR said.

“It remains the case there is scope for a less aggressive path of fiscal tightening,” Kirby said. “We would be seeing a small amount of growth rather contraction.”

NIESR called on the government to loosen its debt reduction plans and borrow more to pay for key infrastructure projects. The think tank expects Chancellor George Osborne to borrow 12.5 billion pounds more than planned in the year through March 2013.  However, NIESR welcomed recent steps to boost the economy such as the Funding for Lending Scheme which is designed to avoid a possible credit crunch and higher interest rates during the crisis.

via Budget cuts hurt British economy – study — RT.

Corporatism and Fraud are Why Were Screwed: | Credit Writedowns

Via Credit Writedowns…

As the Global Financial Crisis rumbles along in its fifth year, we read the latest revelations of bankster fraud, the LIBOR scandal. This follows the muni bond fixing scam detailed a couple of weeks ago, as well as the JPMorgan Chase trading fiasco and the Corzine – MF Global collapse and any number of other scandals in recent months. In every case it was traders run amuck, fixing “markets” to make an easy buck at someone’s expense. In times like these, I always recall Robert Sherrill’s 1990 statement about the S&L crisis that “thievery is what unregulated capitalism is all about.”After 1990 we removed what was left of financial regulations following the flurry of deregulation of the early 1980s that had freed the thrifts so that they could self-destruct. And we are shocked, SHOCKED!, that thieves took over the financial system.Nay, they took over the whole economy and the political system lock, stock, and barrel. They didn’t just blow up finance, they oversaw the swiftest transfer of wealth to the very top the world has ever seen. They screwed workers out of their jobs, they screwed homeowners out of their houses, they screwed retirees out of their pensions, and they screwed municipalities out of their revenues and assets.Financiers are forcing schools, parks, pools, fire departments, senior citizen centers, and libraries to shut down. They are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in fire sales pun intended at prices rigged by twenty-something traders at the biggest and most corrupt institutions the world has ever known.And since they’ve bought the politicians, the policy-makers, and the courts, no one will stop it. Few will even discuss it, since most university administrations have similarly been bought off—in many cases, the universities are even headed by corporate “leaders”–and their professors are on Wall Street’s payrolls.We’re screwed.

More at Corporatism and Fraud are Why Were Screwed: | Credit Writedowns.

Why Europe’s Laws On Vacations Are Better Than Your Wildest Dreams (and How Badly Americans Get Screwed) | | AlterNet

The title pretty much says it all..

We work ourselves to death, while people in other countries take holidays, get family leave and have paid sick time during vacations.

more at Why Europe’s Laws On Vacations Are Better Than Your Wildest Dreams (and How Badly Americans Get Screwed) | | AlterNet.

The Austerity Agenda | Common Dreams

Must read article by Nobel winning economist, Paul Krugman, on what’s really up with all the austerity…

“The boom, not the slump, is the right time for austerity.” So declared John Maynard Keynes 75 years ago, and he was right. Even if you have a long-run deficit problem — and who doesn’t? — slashing spending while the economy is deeply depressed is a self-defeating strategy, because it just deepens the depression.

more at The Austerity Agenda | Common Dreams.

Why is austerity so unpopular in Europe? Because it’s not working. – The Washington Post

Europeans are rebelling against austerity. That’s the read on Sunday’s elections in Greece and France. But why do voters loathe austerity? Perhaps because, as economists have found, efforts to rein in budget deficits can take a wrenching toll on living standards, especially in a recession.

more at Why is austerity so unpopular in Europe? Because it’s not working. – The Washington Post.

Austerity Kills: How the EuroCrisis is Being Used to Break the Social Contract « naked capitalism

Since economists all know that the way to get out of recession is to increase spending, one truly has to conclude that economic recovery is not the austerity proponents goal….

One aspect of the Eurocrisis that has not gotten the attention it deserves is the way it is destroying not just jobs, but the very underpinnings of society. People who took actions that were prudent at the time are increasingly at the mercy of forces beyond their control. And this isn’t a tsunami-type disaster but a man-made one whose severity is worsened by the callous attitudes of the European elites.

more at Austerity Kills: How the EuroCrisis is Being Used to Break the Social Contract « naked capitalism.