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Message: <blockquote data-quote="lovethebomb" data-source="post: 27573175" data-attributes="member: 531830">Okay this became a long reply, sorry about that.The issue is that austerity measures as suggested by IMF rarely work during a sovereign debt crisis. Now the austerity measures that are going to be proposed to us will probably include,- Downsizing government employment- Lowering public employee wages- Curtailing pension benefits- Raising taxes- Privatizing government corporations...among others. Why austerity measures are given as mandatory conditionals is clear enough. They are mainly to increase investor confidence and to make sure that country would not bankroll trying to re-finance unsustainable debt.The problem is, when implemented, austerity measures often exacerbate the financial crisis it swears to improve. Unemployment ballooning, high recession, political and societal chaos are what we usually see as the result instead of the good news it promises. Greece is perhaps the best example. We saw the same happening in Argentina also in Italy and Spain to a lesser extent...Austerity measures are not inherently a bad course of action. For these measures timing is everything so a lot depend on when they are enacted. Measures best work when the country is at the outset of a financial crisis, not when the country is already beginning to struggle under its repercussions. Laying off workers and increasing tax etc. are obviously going to create different waves to exigency that are going to fall unto the original crisis impeding the economic development.So, IMF conditionals should not be mismanaged and approached cautiously...that much is clear. We do not have any option other that going to IMF in order to get the country up and running but people need to understand that we are in for a pretty hairy couple of years. Worse yet, under rash management it can turn into a full-blown humanitarian crisis.</blockquote>

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