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[GreatJustice]

If it's purely "gigantic oil reserves", why did no other government for 20 full years before Chavez have a sustained growth rate like that over multiple years?

Not purely. Regular nationalization of industry but even moreso double digit inflation are also quite helpful.

However, Saudi Arabia is basically nothing but oil industry and STILL averages around 5% growth each year, with no contraction during the recession like Venezuela had, and fairly moderate inflation rates. Is Saudi Arabia's growth the result of their brilliant economic policies? Similarly, the United Arab Emirates experienced an average of around 8% growth each year, which was even higher than Venezuela's over a longer time period and quite a bit more stable to boot.

Actually, for the sake of comparison, growth in the UAE from 2003 to 2007 was:

2003: 16%
2004: 10%
2005: 8.5%
2006: 8.8%
2007: 6.5%

So... basically the same, but longer and more consistent. Actually, I take the previous statements back; oil revenues probably ARE the biggest contributor to Venezuela, considering the correlation with the UAE (a completely unrelated country with different economic policies).

But hey, if you want to argue that Estonia's recovery with 7.8% growth immediately following the recession coupled with a surplus is inferior to America's recovery with ~2% growth immediately following the recession coupled with a huge deficit, be my guest.

Maybe you should shoot yourself in the foot?  Your health will show a marked improvement in the weeks right after you shoot yourself.  Should make you healthier afterwards, right?  I mean your health is improving so much.

If your foot recovers 92% of its capacity a few weeks after being shot, either you're taking some very good medicine or you have regenerative powers.

It's kinda ridiculous to compare some of the smallest economies in the world to the largest. There are 1.3 million people in Estonia, it's a very poor, and still developing economy. Those places ALWAYS have fast growth. Most of their export economy is a service economy taking advantage of the fact they border much larger countries of Russia, Germany, and in Scandinavia.

Just not a comparable situation AT ALL to America, or to large European countries. Plus, u know they have one of the lowest incomes of the entire eurozone, and very high unemployment. They're starting from very low income per GDP. GDP would have to grow faster than America for MANY years to be comparable.

The same things goes for trading-based city-states like Signapore or Hong Kong, they solely exist to service the larger economies around them. That's just not something that can be "emulated" by full-sized countries.

Yet Estonia's growth is considerably larger than that of, say, Lithuania, Latvia, Poland or Hungary, all of which have the same "advantages".

This isn't even mentioning that poorer Eurozone countries have been just as heavily affected by the debt crisis and recession as the richer ones, yet most of them haven't experienced either debt reduction or a recovery.

[mainiac]

If your foot recovers 92% of its capacity a few weeks after being shot, either you're taking some very good medicine or you have regenerative powers.

Well you should be able to hobble on your foot after a few weeks.  Sounds like 92% recovery to me.  So go ahead!  Shoot yourself in the foot!

Yet Estonia's growth is considerably larger than that of, say, Lithuania, Latvia, Poland or Hungary, all of which have the same "advantages".

...And all of whom have governments that implemented austerity too except for Poland.  Poland had a smaller slump then Estonia and is pretty much back to pre-slump GDP.  Or as you would put it, was a failure.

It's downright galling that you would compare Estonia to the other Baltics when the other baltics had essentially the same policies as Estonia.  Pretty convenient argument.  Pick whichever of the three failed the least and use that as your standard bearer.

[Nadaka]

GreatJustice, You just lied. Venezuela has not had a consistent high inflation period since the revolution. They had 1 bad year, and even that at its highest inflationary point had less than half the inflation of pre-Chavez Venezuela.

[GreatJustice]

GreatJustice, You just lied. Venezuela has not had a consistent high inflation period since the revolution. They had 1 bad year, and even that at its highest inflationary point had less than half the inflation of pre-Chavez Venezuela.

Uh, it's had between 40% and 10% inflation since 2003. That's pretty damn high.

Besides that, you totally just ignored the fact that the UAE managed nearly the exact same thing as Chavez's Venezuela, for a longer period of time and with less fluctuation, completely destroying the premise of your argument regardless of whether you consider Venezuela's inflation rate to be high or not.

If your foot recovers 92% of its capacity a few weeks after being shot, either you're taking some very good medicine or you have regenerative powers.

Well you should be able to hobble on your foot after a few weeks.  Sounds like 92% recovery to me.  So go ahead!  Shoot yourself in the foot!

Methinks this analogy is starting to break down.

Yet Estonia's growth is considerably larger than that of, say, Lithuania, Latvia, Poland or Hungary, all of which have the same "advantages".

...And all of whom have governments that implemented austerity too except for Poland.  Poland had a smaller slump then Estonia and is pretty much back to pre-slump GDP.  Or as you would put it, was a failure.

It's downright galling that you would compare Estonia to the other Baltics when the other baltics had essentially the same policies as Estonia.  Pretty convenient argument.  Pick whichever of the three failed the least and use that as your standard bearer.

The primary difference would be that Estonia's "austerity" was more geared towards spending cuts than tax increases (though it included both). Austerity, in of itself, isn't an especially good policy.

[mainiac]

The primary difference would be that Estonia's "austerity" was more geared towards spending cuts than tax increases (though it included both).

So you just expect us to trust you on this highly suspicious assertion that you just pulled out of nowhere based on your track record?

Or is this going to be one of those things where you show something like taxes as a percentage of GDP without accounting for cyclical effects and then change the subject when people point out that you are committing crimes against econometrics?

BTW, if your metric is tax cuts good, tax increases bad then doesn't that mean that you should love Obama?  He has lowered taxes in response to the downturn.  Estonia on the other hand has raised taxes.  So doesn't this mean that Estonia is doing it wrong and the US is doing it right?

[GreatJustice]

The primary difference would be that Estonia's "austerity" was more geared towards spending cuts than tax increases (though it included both).

So you just expect us to trust you on this highly suspicious assertion that you just pulled out of nowhere based on your track record?

Or is this going to be one of those things where you show something like taxes as a percentage of GDP without accounting for cyclical effects and then change the subject when people point out that you are committing crimes against econometrics?

BTW, if your metric is tax cuts good, tax increases bad then doesn't that mean that you should love Obama?  He has lowered taxes in response to the downturn.  Estonia on the other hand has raised taxes.  So doesn't this mean that Estonia is doing it wrong and the US is doing it right?

Well that's not a simplification or anything.

Tax cuts are all well and good, but they're largely pointless without associated spending cuts. Spending cuts are quite a bit more important since they last longer. The "proper" response to a recession would be broad spending AND tax cuts alongside an interest rate increase by the central bank if there is one, as was done in 1921 by the US during the brief recession then. However, the last time I brought that one up you mentioned some irrelevant quotes by Hoover and made a break for it, so its not likely that we'll get any farther using it as an example again.

Now there are plenty of sources that pretty clearly outline what Estonia did (public sector wage cuts alongside some tax increase), but I'm curious as to what you consider a valid source. Would a news article suffice?

[mainiac]

How about the tax rates from the government itself?  Why get less then the best?

You have nice theories.  They contradict all of mainstream economics between 1946-2007 but I will grant you did eventually come at something that is coherent.

[GreatJustice]

How about the tax rates from the government itself?  Why get less then the best?

Sounds good. Unfortunately, I'm not sure where I would find the relevant info. Any links?

You have nice theories.  They contradict all of mainstream economics between 1946-2007 but I will grant you did eventually come at something that is coherent.

Mainstream economics between 1946 and 2007 have something of a poor track record, what with stagflation, the Lost Decade(s), the present recession, etc etc etc

[Eagle_eye]

If spending cuts help a recession, then why did the largest public spending increase ever, WWII, effectively end the depression in the US?

[mainiac]

How about the tax rates from the government itself?  Why get less then the best?

Sounds good. Unfortunately, I'm not sure where I would find the relevant info. Any links?

You have nice theories.  They contradict all of mainstream economics between 1946-2007 but I will grant you did eventually come at something that is coherent.

Mainstream economics between 1946 and 2007 have something of a poor track record, what with stagflation, the Lost Decade(s), the present recession, etc etc etc

Yeah and nothing bad happened with the economy prior to 1946 or after 2007.

[Frumple]

... some days I feel discussions on economics need massively huge "THIS IS NOT A SINGLE VARIABLE ISSUE" stamps plastered all over them. Shit be complicated. Paying attention to one or two variables (gov' spending and tax rates, ferex) can't really give an actual causative explanation, or anything remotely approaching one, for pretty much any bloody thing that happens regarding economics. There's entirely too many other factors to be able to pick out one, or two, or a half dozen, and say, "This is the cause." You can say they might be part of it -- maybe even a major part (though even major ones are going to be relatively minor, compared to the whole kit an'kaboodle.) -- but the whole cause ? Blatant fantasy and wishful thinking. Nothing in these situations are simple. There's pretty much never a single causative influence. There's usually dozens.

Laser-like focus on a limited number of issues is a good way to completely bugger any attempt to meaningfully discuss an economic situation. Fun times!

[EveryZig]

How do spending cuts help a recession?  I can see how you would argue that debt is bad in the long term, but how does that impact the actual recession? (These are not a rhetorical questions; I am honestly not sure how you say that would work.)

[GreatJustice]

If spending cuts help a recession, then why did the largest public spending increase ever, WWII, effectively end the depression in the US?

Depends on what you mean by "ended the depression". If you mean in the literal, GDP sense, then that's mostly because GDP is driven by spending. Hence, the government spending a gigantic amount of money on tanks, planes, etc will drive up GDP even if the economy is in a bad shape. The same thing could be done if the Obama administration decided to spend a couple hundred billion/trillion dollars digging ditches in Nebraska, but it certainly wouldn't improve the economy in a meaningful sense.

In the sense of an actual recovery, that didn't come until after the war, when the economy actually began to grow again, which in turn had more to do with enforced saving as a result of rationing than the war itself.

How about the tax rates from the government itself?  Why get less then the best?

Sounds good. Unfortunately, I'm not sure where I would find the relevant info. Any links?

You have nice theories.  They contradict all of mainstream economics between 1946-2007 but I will grant you did eventually come at something that is coherent.

Mainstream economics between 1946 and 2007 have something of a poor track record, what with stagflation, the Lost Decade(s), the present recession, etc etc etc

Yeah and nothing bad happened with the economy prior to 1946 or after 2007.

Barring the Great Depression (in which interventionist methods were used), certainly nothing before 1913 was quite so economically damaging as, say, stagflation. Recessions/panics weren't as long lasting or devastating, though they appeared to be so as deflation was the norm rather than inflation.

How do spending cuts help a recession?  I can see how you would argue that debt is bad in the long term, but how does that impact the actual recession? (These are not a rhetorical questions; I am honestly not sure how you say that would work.)

They allow for easier resource reallocation in the economy, which allows it to go on a sustainable course and stable recovery as previous malinvestment is purged from the system. If instead stimulus is pursued, the initial "fall" won't be as bad and the recovery will be quicker, but the recovery will be tenuous and another recession/economic problem inevitable due to malinvestment still being present and encouraged to keep the recovery going.

[RedKing]

Last three pages have been HILARIOUS.

I've been converted, y'all. Justicenomics is the future. We shall start by going over the fiscal cliff with gusto for one year, thus setting the starting point GDP so low that the next ten years after it can be nothing but exuberant successes.

Barring the Great Depression (in which interventionist methods were used), certainly nothing before 1913 was quite so economically damaging as, say, stagflation.

....you do realize that the Great Depression occurred after 1913, right? Just sayin.

Beyond that, let's see:

1807 - Jefferson embargoes ALL foreign trade, triggers a six-year recession

1836 (Panic of 1837) - Jackson insists on use of silver currency, triggers six-year recession, massive unemployment, agricultural price failures, and a decrease in the money supply of 58%

1873 - Stock prices collapse in Vienna, economic panic spreads to US, dovetailed into some banking/railway collapses in the US, triggers a six-year recession which marked the start of a 23-year period known as the Long Depression.

Honestly, if you look at most economic failures in US history, they're caused when the Fed (or before the Fed's creation, the US government through the Bank of the United States) shrinks the money supply and raises interest rates. We've never had a period of hyperinflation like Weimar Germany, in part because the wealthy have always exerted considerable pressure in this country to KILL INFLATION WITH FIRE. Why? Because inflation is the enemy of accrued wealth. Deflation is the enemy of a functioning economy, but if you can afford to sit tight on your money, you'll make out like a bandit when the economy recovers.

[Nadaka]

http://blogs.nature.com/news/2012/11/lamar-smith-wins-nomination-for-top-house-science-position.html

Lamar Smith, noted AGW denier is now the chairman of the house Science, Space and Technology committee.