tag:blogger.com,1999:blog-2546602206734889307.post3494082842160247575..comments2024-03-29T12:16:15.785+00:00Comments on mainly macro: Austerity is not even a sensible precautionary policy when we have Quantitative EasingMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2546602206734889307.post-60199531663326007092013-06-10T10:08:03.171+00:002013-06-10T10:08:03.171+00:00It really follows that any argument that countries...It really follows that any argument that countries like the US and the UK can default are premised on either the politicians will fail spectacularly (e.g. not raising the debt ceiling), or the central bank failing spectacularly. But that does not mean that any of the reasons that are put up are valid, because in all these cases the real reason will be any one of those two, not worries about debt or inflation or something like that. So I'm not worried about debt or inflation leading to big problems. What I am worried about, and which is much more credible, is for the US to elect Rand Paul, who then goes on to appoint his father to the FED. Now that would be something to worry about. That, I think, is the only valid reason to worry why the US may default. And I would say that the best way to avoid this is to have the economy grow, that is, less austerity (economic factors are usually the best predictors for a US presidential election, as was confirmed last year).Christiaanhttps://www.blogger.com/profile/13390409981798681710noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-79456175465144740802011-12-23T21:20:03.450+00:002011-12-23T21:20:03.450+00:00The UK has made another argument to support its po...The UK has made another argument to support its policy: boosting consumer confidence (as against bond market confidence). The analogy is perhaps the Sabian housewife who has just taken over running the household finances after discovering the husband was an unexpected spendthrift. Namely, that borrowing more money to buy Christmas presents sets the wrong example, and it will be better for the children to go without as it will at least set the right tone and reduce the level of tut-tutting from the neighbours. <br /><br />This argument ignores the macro-economic fundamentals that the neighbours make toys, run the toy shop, sell wrapping paper and so on. Tho they might feel relieved the housewife is in charge they can't compensate for the woman's drop in spending.William Reevehttps://www.blogger.com/profile/02317174324552230550noreply@blogger.com