Does Austerity Work?

Does Austerity Work? Critically evaluate claims that austerity is the most effective strategy to counter a recession. Austerity is one of the most controversial economic policies, not only because there is an ongoing debate between academics and policy makers about its effectiveness and consequences, but also because it effects the life of millions and have caused many political and social turmoil when implemented. The advocate of this policy argues that it is the most effective and even more; it is the solution regardless of the structure of the economy and the cause of the economic downturn or recession. I will argue that this is not true, and that there are other policy designs that proved effective and delivered good results with less social cost in term of unemployment, social disturbances and welfare reduction. Austerity measures were recommended by policy makers in advanced economies as well as international organizations such as the IMF and the Word Bank. They were prescribed as a remedy in many economics situations and contexts in the developing countries, for example: Latin America sovereign debt crisis and the Asian crisis, furthermore in the aftermath of the financial crisis of 2007 and the great rescission that followed austerity policies were implemented or advocated in developed economies like UK, USA and part of the debt troubled EU countries referred to as PIGS (Portugal, Ireland, Greece and Spain) (Blyth, 2013). But it is important to first define what is meant by austerity and what is the underlying economic theory behind it. Usually when economists or policy makers refer to austerity they generally mean the reduction in the structural deficit in the government budget regardless of its effect on the business cycle, and it is also refers to the policy of reducing the size of the public sector in general (Room, 2015). This can be done through lowering the government expenditure (like social and welfare benefits, spending on infrastructure and healthcare, lowering wages, etc.). The underlying economic reasoning behind austerity policy is that high level of public debt is a burden on the future generations because any debt should be paid in the future from budget surpluses raised form tax payers. It also cause higher level of interest rate (due to higher demand by government) which in turn discourage private investment. Accordingly austerity policy by reducing the government expenditure will re duce the public debt, consequently increase confidence in the economy, reduce interest rates and consequently stimulate private investment spending and the economy. A common theme in austerity policy is the believe that government intervention itself through fiscal policy is the source of economic imbalances and it associate crisis with bad public finance management and reckless spending behavior (Wren-Lewis, 2016). The advocate of austerity say that the national economy cannot grow out of debt. Some scholars argue that if the ratio of debt to gross domestic product (GDP) is reach 90% for advanced economies, or 60% for emerging economies, the debt will slow down economic growth (Reinhart and Rogoff, 2010). In this situation, the economy can easily experience financial crises because the investor confidence will fall, and this will make foreign direct investment become less (Konzelmann, 2014; Reinhart and Rogoff, 2010). Another connected idea is that high level of debt means that the government needs to take capital resources from the community to pay for it, and this will also slow the growth of the economy. The national economies with high debt therefore likely to raise interest rates to encourage demand for government bonds, and this will make it more expensive for the public to borrow money. The result of this expense is low consumption and growth, so the economy will steadily decline (Boccia , 2013). The high interest rates also make the currency become more valuable, which means that exports slow down because they become more expensive for international market, and this will also slow down the economy (Patillo et al., 2002). The advocate of austerity therefore argue that high levels of debt will cause the economy to slow down, and say that cutting debt, which austerity does, is the best way to help countries with high debt to achieve growth (Blyth, 2013). There are ample of evidence contradicting the argument that the austerity is always a solution to recession. An analysis of the performance and consequences of such policies suggest that austerity policy in practice led in many instances to worsening the recession and budget deficit mainly due to its blind application and its tendency to ignore the different economic structure for each country, in fact it worsen the symptoms that it designed to cure (Haltom and Lubik, 2013). Lets look at the experience of Spain with austerity. Before the 2007 financial crisis Spain had enjoyed robust economy with long period of growth led by the real estate sector, the budget was actually in surplus at around 2.5% of the GDP. When the crisis of 2007 hit Spain economic vulnerabilities; mainly uncompetitive private sector and the over reliance on real estate sector and excessive borrowing by the private sector. The crisis resulted in lower demand and hence lower tax collection and budget deficit. Furth ermore deterioration in bank assets quality and solvency problem surfaced (Dellepiane and Hardiman, 2012). In 2010 Spain like many other troubled EU countries implemented the austerity formula i.e. cut spending. This solution was based on misinterpretation of the crisis cause in Spain (and southern Europe in general) that the crisis is caused by the mismanaged public finances, so not surprisingly was the result, instead of the expansionary austerity Spain got stuck of a vicious circle of lower demand (driven by lower government spending), lower tax collection (revenues), higher unemployment and further deterioration of the financial sector health (Dellepiane and Hardiman, 2012). In fact this was the situation of all the EU countries that implemented austerities, as we can show from the economic performance of Portugal, Italy, Ireland, Greece and Spain (PIIGS) since 2008. For all these countries, austerity made their debt increase, not decline, and economic activity slowed down (Blyth, 2013). In Greece, the ration of debt to GDP grew from 106% to 170% from 2007 to 2012, even though there w as much austerity cuts. The same case happened on Portugal, Italy, Ireland and Spain. The economist Paul Krugman pointed out that the idea of austerity collapsed under the empirical results of the policy of austerity, and he refers to the academic and research body that supported austerity did not stand scrutiny and turned out to be based on dubious statistical methods and sometimes outright mistakes (Krugman, 2015). In similar way, Simon Wren-Lewis (2016) observed that the austerity in Europe was unnecessary outcome of the fiscal contraction. In other words, the European countries could have successfully run a gradual fiscal consolidation accompanied with expansionary monetary policy by the ECB to offset the contractionary effect of the fiscal policy. However in case of Europe in 2010 the interest rates was already at zero and there was no room for expansionary monetary policy (a situation also referred to as liquidity trap), so postponing fiscal consolidation would not just delay austerity but avoid it all together (Wren-Lewis, 2016). It is therefore very clear that austerity cannot be a solution for recessions, but the question is then what can be the cure. If we go back in the recent history of the economic theory and policy we can establish that there have been examples of an alternative economic policy to austerity that has successfully dealt with recessions and restored the economic activity to the growth path. This policy was the Keynesian economic that prevailed for a period of 30 years from the world war II till late 1970s. Keynes model of how the economy works are based on the idea that when there is economic downturn and since business expectation in the recession are low because of the uncertainty only the government has can restore confidence to the economy and the policy recommendation is to increase government spending (expansionary fiscal policy) to boost he general level of economic activity, increase demand and compensate for the lower private demand (Burton, 2016). This is the very opposite of th e idea of austerity, and many economists now argue the same thing. Paul Krugman (2012) is a famous example of this argument. Krugman rejects the idea of austerity, and argues that to help the economy come out of the recession it is necessary for the government to increase debt. The foundation of this argument is the nature of debt. Krugman (2012) says that the economist must consider public debt and private debt as two separate things, rather than just the same. His reason for this idea is that, first, private debt needs to be recompensed, but this is not the issue with government debt. For the governments, it is just necessary to make sure that there is enough tax to cover debts. Another difference is that in private debt the money is owed to someone else, but government debt is money that the government owes to itself and to the country, such as pensions and other requirements (Krugman 2012). If these differences are considered, it becomes clear that in a situation of high personal debt, a good solution is for the government to take on higher debt to help boost the economic activity (Krugman and Eggertsson, 2012). Krugman and Eggertsson (2012) argue that fiscal expenditure must be used to maintain employment, productivity and earnings at the time that private debt is decreased, because this will keep the tax earnings up and permit the government to decrease its own debt when the recession is over. Beside, increased financial expansion will work better in a situation where interest rates are lower, because there will be lower crowding out of private business (Krugman and Eggertsson, 2012: 1490). In such situations, financial stimulus will therefore boost economic activity and give good growth to GDP, while decreases in public spending will have the opposite effect, slowing growth and bringing GDP down (Holland and Portes, 2012). In this essay, I have shown the foundation of the idea of austerity and explained why the economists who believe it say that it is the solution for the situation of a recession. The advocate of austerity argues that high public debt makes it more expensive to obtain a loan, and this causes the economy to slow. Furthermore, it also causes currency inflation, which causes exports to become more expensive and slows economic activity. FDI also slows down, and all these factors together mean that the economy cannot achieve any development. The solution of austerity is therefore to cut public spending to bring down the public debt. However, the empirical evidence of the effects of austerity measures show that it is not a useful policy to achieve these ends. In countries such as Greece, Spain and others where austerity has been used, austerity has caused the opposite of these results: ratio of debt to GDP gets higher and higher, unemployment rises, economic growth slows, and the recession b ecomes worse. The reason for this fail of austerity to solve the problem is because the advocate of austerity does not differentiate between public debt and private debt, as Krugman (2012) argues. In the recession, if the government takes on more debt through implementing fiscal stimulus, it can stimulate economic activity by allowing people to spend and take loans. This will increase the circulation of capital, which will have many positive effects in bringing about growth. Then, when the private debt level is high and the economy is more active, the government can reduce its financial stimulus to bring down its debt. In both theoretically and empirically, it is clear that austerity cannot solve the problems that cause recession, and it therefore necessary to consider the alternatives. References Dauderstà ¤dt, M. ed., 2013. Alternatives to Austerity: Progressive Growth Strategies for Europe. Friedrich-Ebert-Stiftung. Krugman, P., 2015. The austerity delusion. The Guardian, 29. Room, G., 2015. Alternatives to Austerity. Institute for Policy Research, University of Bath. (IPR Spotlight) Haltom, R.C. and Lubik, T.A., 2013. Is Fiscal Austerity Good for the Economy?. Richmond Fed Economic Brief, (Sept), pp.1-5. http://www.ilo.org/wcmsp5/groups/public/@ed_dialogue/@actrav/documents/publication/wcms_158927.pdf Wren-Lewis, S., 2016. A general theory of austerity. BSG Working Paper Series, University of Oxford. Blyth, M., 2013. Austerity: The history of a dangerous idea. Oxford: Oxford University Press. Dellepiane Avellaneda, Sebastian and Hardiman, Niamh (2012) The New Politics of Austerity : Fiscal Responses to Crisis in Ireland and Spain. Working paper. UCD Geary Institute, Dublin. Burton, M., 2016. Is Austerity Necessary?. In The Politics of Austerity (pp. 189-204). Palgrave Macmillan UK. Reinhart, Carmen and Kenneth Rogoff. 2010. Growth in a time of debt. The American Economic Review100(2): 573-578. Konzelmann, Suzanne J. 2014. The Political Economics of Austerity. Cambridge Journal of Economics38(4): 701-741. Boccia, Romina. 2013. How the United States High Debt Will Weaken the Economy and Hurt Americans. Backgrounder 2768: 1-8. Pattillo, C.A., Poirson, H. and Ricci, L.A., 2002. External debt and growth (No. 2002-2069). International Monetary Fund. Krugman, Paul. 2012. Nobody Understands Debt. The New York Times: The Opinion Pages. Accessed 28 October 2014. Available at http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html?_r=1 Krugman, Paul and Gauti Eggertsson. 2012, Debt, Deleveraging, and the Liquidity Trap: a Fisher-Minsky-Koo approach. The Quarterly Journal of Economics 127(3): 1469-1518. Holland, Dawn and Jonathan Portes. 2012. Self-Defeating Austerity? National Institute Economic Review 222(222): 4-10.

Creation, the Fall, and the Journey of Redemption

Describe how the architecture and rituals associated with early catholic cathedrals represent the Creation, the Fall, and the journey of Redemption that leads back to the presence of God. Include in your essay a discussion of the east-west orientation of the cathedral, the atrium, the baptistery or baptismal font, anointing, and the symbolic layout of the structure. Creation begins with the fall and continues as a journey towards redemption through the resurrection. Catholics are well known for their elaborate Cathedrals. Some are so famous that people travel from all over the world to admire its artistic workmanship. In Christianity the Catholic denomination is the largest denomination. The leader being the Pope who lives in Rome, Italy. The Catholic Church with their symbols can be related closely to that of what is found in LDS symbols. Many of the most sacred of ceremonies from these two religions are closely alike. This is due because they both originate from Hebrew origins in symbolic meaning behind the ceremonies. Cathedrals and LDS Temples can be related as a house here on earth dedicated to God. Cathedrals were set apart with the best the people had to offer. Examples of materials used to build the Cathedrals were purple, purple die was the most expensive dye in previous times, blue dye, red dye, silver, and gold. The stained glass and wall art was used to tell the stories of creation, struggles, faith, hope, and redemption. We can relate this to LDS temples because we try to build temples with only the best of materials. It is filled as white, blue, and gold linings. Temples are usually eloquent but they try to avoid from over expressing beauty in the temple and keep in clean. This is because one theme of LDS temples is clean. It is a place where clean beings can dwell, for example, God and even our souls because of the redemption power of God. Endless novels have been written about the fall. Perhaps the biggest change that has happened in the Catholic Church is when the ordinance of baptism started changing over time. Sometimes the change is a good thing because God will’s it. An example of this is when Joseph Smith first gave the temple ceremonies and ordinances it took 6 hours for the endowment session. Things are much different today. Other times things change because with time we forget, or at the very least we unknowingly change things. I remember a story when because of wars some LDS churches in Germany worked as best as they could under the circumstances. Eventually when the war was done and higher LDS officials were able to come into Germany and visit the Saints something astonishing happened. It had only been a matter of a few years and yet the way the Sacrament was being administered was not in line with the Church guidelines. Talk to Brother Openshaw on campus if you want a more credible and full detailed account of this story. The Journey of Redemption is all encompassing. I believe that everything in this mortal life has a creation, fall, and eventual redemption. The articles we read this week made strong bridges showing that Cathedrals perhaps paved the way for eventual LDS temples to be built. On a side note I find it to be a testimony builder for there to be so many similarities between LDS temples and the Catholic Church. It is true that we have more common than we do in difference. I believe God influences everyone around the world regardless of their religion. So when another group of people who are separate from us have so many of the same beliefs it gives me comfort knowing that God loves all men and women, and He reaches out to teach us and loves us all.

Compatibility of Free Will in The Tenseless Theory of Time...

, The debate between free will and fatalism has existed since the conceptualization of time. On one hand, in everyday life, time flows in a uniform fashion. People experience time in which there is a past, present, and a future. Yet, physicists and philosophers see time as something completely different. In fact, they see time as an illusion. Called the tenseless theory of time, time does not flow but this theory views time as a fourth dimension where all past, present, and future events are equal (Callender Edney, 2004). Essentially, this theory proposes that there is no passage of time and no becoming of future events. As a result, one can view this theory as a â€Å"block† universe in which every event that has happened, is happening as of†¦show more content†¦Thus, if fatalism is about the penultimate outcome, then free will is the process about decision-making that leads up to the final outcome. Not only does free will exist, it can also be viewed as compatible with the tenseless theory of time as well. Firstly, fatalism alludes to the idea that what happened was always going to happen. Fatalism is the view in which it implies there are no alternate possibilities. The tenseless theory of time is committed to this belief. Yet, this assumption is still ambiguous. The brain and especially the mind is complex. Experiments done in the field of neuroscience have tried to resolve this particular question. Can it be shown that what will happen has already been pre-determined in the mind? One experiment, conducted by Benjamin Libet (1983), tried to answer this question. In the experiment, he would ask each participant to sit at a desk in front of a timer. He would put electrodes onto the scalp and ask the participant to carry out a motor activity, such as a flick of the wrist. He would also ask the participant to note the position of the timer when the participant felt that they were urged to do the activity. Libet found there was a 200 millisecon d delay, on average, between

Internship-HR Job Assessment Posting Assessment

Job Posting Assessment Job Description Internship-HR Talent Acquisition - Summer 2018 Description Under general supervision provides essential support for departmental functions that include a wide range of activities and initiatives. Primary responsibilities include: †¢Perform operational and administrative functions as it relates to academic major †¢Work on special projects as assigned by functional leader †¢Assist in implementing functional strategies and support the team in reaching goals and objectives. †¢Support the departmental deliverables and help in planning and supporting tasks. Job Specific Responsibilities †¢Assist and learn the recruiting process †¢Coordinate sourcing, screening, and†¦show more content†¦We will select a date for all the individuals to come and interview with us. We would then converse and decide which interviewee we thought would be best considered for the job that we posted. 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