Originally
posted by
Requiem:
We just print more money meng... Notice how we are going to bail out europe? We will print more money lower the interest for the european countries to borrow our money then Americans pay for it in the form of inflation.
Obama said he lowered our taxes however when he allows inflation like that it's basically another form of a tax.
Also I read an article a long time ago talking about how a lot of Canadians travel south of their border (USA) to have more advanced procedures done like heart surgery. Do you happen to know anything about that?
If you look at europe which for the most part are all socialist countries with massive social programs they cannot sustain it and right now are about to break their backs. The problem is too many social programs like that you simply can't sustain over the long run. Everyone want's something for nothing.
First off, inflation can be a good thing when households are experiencing high levels of debt. Allows them to pay off their debts faster and better consolidate. This mantra repeated incessantly (especially by the right) that inflation is always evil has certainly stood in the way of progress getting out of this recession. And it's the lesser of two evils compared with the financial calamity that a break up of the Euro would be. The real answer to avoiding these bailouts is increased regulation and oversight. An ounce of prevention is worth a pound of cure and what not.
If you look at the countries in Europe that are the most socialistic, you will find that they are weathering this crisis the best. These are basically the Northern European/Scandinavian countries like Sweden and Germany. Sweden in particular has one of the strongest safety nets of any country in the world and has largely not been affected by this whole disaster.
The PIIGS (Portugal, Ireland, Italy, Greece, and Spain) countries that have been most damaged by this are in bad shape but it has nothing to the size of their social programs. Some countries, such as Portugal and Spain are limited geographically from the rest of Europe, making economic integration harder. Hell, before this whole mess started Spain had a very low debt level (lower than the UK's as a % of GDP) and was running a surplus. Their problems stem from the banking crisis and not being able to manipulate their own currency (Spain desperately needs inflation to right itself but can't make it happen as part of the Euro). It has nothing to do with social programs of any sort.
Greece has been in debt it's entire modern existence. From when it finally split off from Ottoman Empire, it's owed money to people, frequently the British, Germans, French, or Russians. This is really a pretty familiar position for them honestly. They've only been stable as a country when an external power props them up (like the US did in the Cold War). The Greeks major financial problems don't come from social programs, they come from trying to maintain military parity with the Turks. The Greeks are also screwed by their geography.
Which leads me to the Italians. One of the reasons the French, Dutch, and Germans are so efficient (Americans too) is the river system. Rivers allow for the cheap transportation of goods and the build up of capital for investment. Countries like the US with the awesome Mississippi-Missouri-Ohio River system don't need to spend as much money building infrastructure. Countries like Italy do. And it's really clear in Italy. They have one good, navigable river, the Po, and sure enough throughout history the Po Valley has been prosperous. The rest of Italy is fractured, no good transportation options, mountains running down the spine. It costs a lot of money for economic growth in Italy. You also have tremendous political instability there, something like ~65 governments since the end of World War 2. That has much more to do with their current situation than do any government social programs.
Ireland is most fun to compare with Iceland. Both countries were in similar positions at the same time. Both called for savage cuts to social programs and outside austerity programs being instituted. Ireland took all of these suggestions and has floundered. Iceland did not do that and have recovered with a minimal impact to the quality of life of the normal people.
The bottom line is that none of the issues facing Europe stem from their austerity programs. Generally what happened there is the same thing that happened in the US with our housing crisis. Banks loaned money at ridiculous rates to people who couldn't afford it because there was no accountability. It was heads they won, tails the taxpayers lose. It came up tails. You also have the problem that generally economic less prosperous countries grow economically by exporting, something not really possible when you are with Germany in non-tariff trade union.
I urge you to please move off your Fox talking points and pick up a macro economics textbook.
