Trefoil, your comments about current account differentials is just another way of talking about the failure to use revenue and debt, deficit spending, to grow assets, but instead use the funds to sustain and grow government spending on overhead consumption. Of course that would result in a Greek economy with a declining current account; and a declining ability to pay back its debt.
The only intelligent response is from trefoil.....Sarkozy is GONE...the French know their history, and unlike the dopey Americans, the masses are aware of what is going on... Soros said it; and he knows a little...austerity is not the answer to systematic failure on the TOP and foolish gambling in the derivatives markets. The linchpin is derivatives! That is what ultimately had caused the meltdown, or at least exaggerated it to the point of too big to fail. Right now austerity will just result chaos and mayhem.Look at Greece... and rightfully so. If you promised the US biker geezer a social security to which he paid into for 40 years and now you will tell him "fuck you, I was jut joking" he will get his shotgun and start getting pissed off very soon. Does this paint you the picture? I am not in favor or overspending and socialism (especially the Obama kind) but I do not want a civil war nor urban unrest in the USA.
Then whats your solution? The PIIGS ran massive structural deficits and debts well before '08. The recession merely uncovered (and accelerated) their gigantic shortfalls. Either the EU collapses, or they integrate. I don't see any other option. As for "austerity". C'mon. Every country is responsible to run a balanced budget. If Greeks can't do it, either Brussels pays their way (like Trefoil mentioned), or they leave and devalue. What other options exist? You're talking like this entire crisis is an illusion and we could merely step outside and be in happy land, on a whim. It's more complicated than derivatives. Derivatives mean jackshit when the underwriter is the only party responsible to honor it. Socializing derivatives losses to taxpayers and future generations ensures the tens of trillions that would otherwise never get paid, are worked off and paid to banker fucks, for the next 2 decades. The other problem - Western employment is structurally deficient. The productive assets Breen mentioned necessary to pay off this debt were exported to Asia over the past 30 years. Those jobs aren't coming back. Maybe the solution to all this is a Global Government to make China pay for the anglosaxons....?? This whole communal solution to everything is an anathema to capitalism and returns us back to a socialist/communistic model, THAT DOESN'T WORK. So lets get real.
Proof that austerity works: http://www.forbes.com/sites/danielm...ity-another-exploding-cigar-for-paul-krugman/ http://www.nationalreview.com/corne...sterity-works-down-under-too-patrick-brennan# http://globalbrief.ca/fredlazar/2011/11/29/austerity-works-according-to-jean-chretien/
No. Germany was the most competitive economy in Europe before the creation of the euro. Inside a currency union, the most competitive economy gets what I specified, if you actually read and understood what I posted: the interest rate it needs at the time it needs it, and a currency that allows it to export to the other members of the union at an advantageous price. The other members of the union get the wrong interest rate at the wrong time, mostly, and their companies have to compete against the best without the buffer of a currency that prices the products in a way that keeps them at least somewhat on a level playing field. The effect is apparent in the US as well, if you compare Florida to the rest of the country. Every single time there's a big bubble, Florida real estate has the biggest bubble, because rates in the US are NEVER set according to the needs of Florida; it's a passive, insignificant economy and it always will be as long as it stays inside the US, and of course it will because it has no choice. Florida = Spain or Ireland. Very simple and apparent, if you bother to actually look at what happens in the real world rather than filtering everything through a left/right ideological prism. Ireland is an economy like Puerto Rico, and there's no helping that country. Spain, however, has been destroyed by its membership in the euro. It needs to get out. If it doesn't, it will always be the Florida of the eurozone. I don't think that's what Spain wants.
Unfortunately I have no tangible solution If I did I would run for some office.... NOT... The EU will integrate but that will take a long time and lots of pain.. ..but misdirecting from bank screw ups and political/industry collusion, systematic fraud and mismanagement in what we call "capitalistic" system is not the answer. We must face the problems, not lie and try to solve them on the back of the little guys. This will just cause huge problems.
I agree. But what we have isn't capitalist. It's more like soft fascism (collusion of industry/Government, like you said). The reason why the crisis is bandied about as capitalism, is more a propaganda effort by the Fortune 100 and Government, to consolidate the economy with more regulation. Another attack. Our watered-down version of capitalism with a central bank would have policed asset bubbles and let the finance bitches go tits up with reasonable rates + a tariff against Chindia. Problem is, like you said, the Government is bought and paid for, and more regulation just adds more ways Corporations can outlaw competition and create mini fiefdoms. Yes, the real problems need to be addressed, unfortunately, stemming out of this wanton corruption has been a real hallowing out of our economy, plus massive debt, that makes us Greece, real soon.
Agree... http://www.amazon.com/Fuckism-An-Im...2088/ref=sr_1_1?ie=UTF8&qid=1339087779&sr=8-1 The PURE idea of "austerity" is not all that bad. The problem is that the tea party's idea is fuck the people, we go t ours....erase medicare, erase SS, shoot the socialists...mainly as a knee-jerk reaction of Obama's blatant pandering and mismanagement. My idea; Austerity= eliminate all fraud and mismanagement FIRST. See where it leads us...
It's a great idea. I think the closest we'll get is a true libertarian president - Ron Paul. He'd shine a light and clean it up. But the sad reality is, people get the government they deserve. Americans voted for corrupt, lying sacks of shit, because, in earnest, many Americans themselves are corrupt, lying sacks of shit. It's a morality problem... On the Left, we got a boatload of minorities and trailer trash losers who'd rather sit at home, drink beer, and collect a pay check rather than work for a living. Don't forgot the public employee unions sucking the taxpayers dry. Then, on the right, there's a bunch of fanatical religious zealots who enjoy killing brown people in the name of their God, who don't mind bankrupting the Country to do it. SS is broke, the money isn't there. It was spent in the fiscal year it was paid in. Medicare and Medicaid, yes and no. At the least, none of the programs are Constitutional. Either we're a rule of law, or not. I like the idea of some of this at the State level. Maybe remit to States their SS and Medicare portion, then end the programs at the Federal level? We're seriously going broke. The Government borrows 4 dollars for every 10 it spends. Unless we get the jobs back quick, the budget will go into triage mode, and everything ends with a bang.
yes, all true, but do not forget that we SOMEHOW have the funds to build roads and schools in Afghanistan, Iraq and fuck knows where else. That is sheer lunacy and it simply won't fly...