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Old 04-28-2012, 10:12 PM
 
9,848 posts, read 8,251,950 times
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Quote:
Originally Posted by joebaldknobber View Post
When Brazil's economy collapses; it will collapse completely in 2 days.

Where are the anarchists in Europe? Europe is in a malaise that ain't going anywhere.
So, was June a good time for me to go through Italy, Greece, Turkey, Croatia and other places for a month?
Am I going to get into the Vatican and Sistine Chapel for $2 with tip?
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Old 04-28-2012, 10:17 PM
 
3,201 posts, read 3,843,984 times
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You might want to buy a beachfront condo in Malaga, Spain for $40,000 in 3 or 4 years.

In the land of the blind, the one eyed man is King!

Quote:
Originally Posted by RCCCB View Post
So, was June a good time for me to go through Italy, Greece, Turkey, Croatia and other places for a month?
Am I going to get into the Vatican and Sistine Chapel for $2 with tip?
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Old 04-29-2012, 05:21 AM
 
692 posts, read 1,351,091 times
Reputation: 455
Britain isn't in the Eurozone, a lot of Britain's problems relate to the collapse of the US Real Estate Market. A market many British Banks and Financial Institutions had been heavily involved in.

As a result there was a banking crash and the Government had to bail out the banks, leading to massive debts, on top of a budget defcit.

The Previous Labour Government was widely criticised due to it's failure to regulate the Banking Sector properly and for taking responcibility for oversight of the Banks from the Bank of England to a newly formed Financial Services Authority (FSA). The FSA being heavily criticised in an inquiry in to the collape in the Banking Sector and subsequent reccesion.

Britain doesn't really have a choice when it comes to cuts, whichever political party is elected is going to have to make them, the only real difference being how deep and how quickly we make these cuts. The Conservative Party (Right) view is if we make substantial cuts now we will be better off in the future having to pay less interest on future debt, the Labour party (Left) have claimed cutting too deep and too quickly will hurt the most vunerable in society in terms of services and that we should cut less over a longer period and pay the extra interest. Either way there is still going to be cuts.

The International Monetary Fund has backed the Conservative view, claiming the current measures are very sensible in terms of stabalising the economy, in terms of Britain's Credit Rating and in terms of future growth. Although in terms of Britain's minimal growth figures they simply reflect the fact that Britain does the vast majority of it's trade within the EU, with the current Eurozone crisis and European Recession hitting British exports and services, as does all the talk of a double dip recession. The truth being whichever party is in power there is still going to be the same set of global influences on the British Economy, the same European and World recession going on around us and the same need to cut expenditure, the argument as to how deep and how quickly been akin to rearranging the deck chairs on the Titanic.

IMF head backs UK austerity measures - UK Politics - UK - The Independent

Britain's credit rating downgrade threat a 'reality check' says George Osborne - Telegraph

uk-double-dip-recession-what the economists think

BBC News - UK economy in double-dip recession

Not Everyone Loses in Double Dip Britain




Last edited by Mulhall; 04-29-2012 at 05:52 AM..
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Old 04-29-2012, 07:47 AM
 
Location: Long Island, NY
19,792 posts, read 13,881,868 times
Reputation: 5661
Quote:
Originally Posted by RCCCB View Post
This is where we are going next if we don't shrink the welfare state, the government and government employment.
Politicians there and here love to get elected and kick things down the road.
Obama was OK with 5+trillion in new debt to kick it down the road.

Well as we are learning from these socialists, down the road is a cliff as well.

For decades we have suffered the cancer of the great society, great big government and great big union employment in government. FAIL FAIL FAIL FAIL.
The conservative explanation of Europe's economic woes is that it’s all about excessive welfare states. How does that hold up? Well, let’s look at public social expenditures as a share of GDP in 2007, before the crisis, from the OECD Factbook:



The German story is that it’s about fiscal profligacy, running excessive deficits. From the IMF WEO database, here’s the average budget deficit between 1999 (the beginning of the euro) and 2007:



Greece is there, and Italy (although its deficits were not very big, and the ratio of debt to GDP fell over the period). But Portugal doesn’t stand out, and Spain and Ireland were models of virtue.

Ok, so the fallacious belief of the right-wing, that socialist policies are the cause of Europe's problems, does not hold up in the real world. If they did, we would find the countries, like those in Scandinavia, who have the biggest welfare safety nets, in distress. but we don't.

Dean Baker wrote a very good column killing this debt is the problem meme:
Among Italy, Greece, Spain and Portugal, "only Greece was consistently experiencing a rise in its debt to GDP ratio. In Portugal there was some increase in the debt to GDP ratio in the years prior to the recession, but Italy's debt to GDP ratio actually had been trending downward since 2000. Spain was running budget surpluses and had a considerably lower debt to GDP ratio than Germany.

The article also asserts that the market is forcing Italy to reform its budget. This is somewhat misleading since the European Central Bank (ECB) has played a major role in creating current market conditions. The ECB has been considerably less expansionary than the Fed during the downturn, even raising interest rates last spring, ostensibly to fight inflation. In addition to pushing up interest rates on government debt, the ECB's policy has reduced growth and employment, worsening the budget situation of euro zone countries."

If we construct an “average” troubled European government and take debt to GDP from the IMF debt database, and weight the five GIPSI countries by their GDP in 2007. Here’s what we get:



The debt/GDP ratio for the group was falling before the crisis. Europeans were happy to declare Ireland and Spain major success stories, until they weren't.



Neither Italy or Spain were fiscally profligate.

So, we can toss RCCCB's theory about Europe that it's all about the failed welfare state and budget deficits. That's clearly the wrong explanation.

But what is there right answer?

Now let's look at balance of payments:



What we’re basically looking at, then, is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe. It’s not a perfect fit -- Italy managed to have relatively high inflation without large trade deficits. But it’s the main way you should think about where we are.

And the key point is that the two false diagnoses lead to policies that don’t address the real problem. You can slash the welfare state all you want (and the right wants to slash it down to bathtub-drowning size), but this has very little to do with export competitiveness. You can pursue crippling fiscal austerity, but this improves the external balance only by driving down the economy and hence import demand, with maybe, maybe, a gradual “internal devaluation” caused by high unemployment.
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Old 04-29-2012, 07:55 AM
 
Location: Long Island, NY
19,792 posts, read 13,881,868 times
Reputation: 5661
Quote:
Originally Posted by Mulhall View Post
Britain isn't in the Eurozone, a lot of Britain's problems relate to the collapse of the US Real Estate Market. A market many British Banks and Financial Institutions had been heavily involved in.

As a result there was a banking crash and the Government had to bail out the banks, leading to massive debts, on top of a budget defcit.
The UK is a good example. You discuss above what got them in the crisis. That doesn't explain why they are still heading in the wrong direction.

This is from Britain’s Office of National Statistics (pdf):



When David Cameron became PM, he bought completely into austerity as a solution.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s, which combated the Depression with expansion instead of austerity.
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Old 04-29-2012, 07:56 AM
 
29,939 posts, read 39,343,634 times
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Quote:
Originally Posted by padcrasher View Post
Paul Krugman told the Europeans austerity would make things worse and that's just what is happening.

He also told Obama and these right wing idiots that the US stimulus bill was too small and too loaded with ineffective tax cuts.

He also said if Obama went along with these right wing idiot lawmakers and made the bill too small that it wouldn't be nearly effective.

He also said the GOP would blame Obama for it not working after he caved into their demands that it be smaller and too loaded with tax cuts.

And that's just what happened.

A President with no character to fight for what is right, caving to a majority of right wing idiots (some democrats) trying to run the economy into the ground.
Quote:
MONTHLY STATEMENT OF THE PUBLIC DEBT OF THE UNITED STATES
JANUARY 31, 2009

$10,632,080,000,000

MONTHLY STATEMENT OF THE PUBLIC DEBT OF THE UNITED
STATES
MARCH 31, 2012

$15,582,079,000,000
Quote:
GDP - 2012q1
$15,461,800,000
Even worse:

Quote:
GDP in billions of chained 2005 dollars
2009q1 12,663,200,000
2012q1 13,502,000,000
And you wanted him to spend even more money? No wonder this country is in a GD crap house. Its people are freaking retarded.
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Old 04-29-2012, 07:56 AM
 
2,385 posts, read 1,580,046 times
Reputation: 923
Quote:
Originally Posted by joebaldknobber View Post
When Brazil's economy collapses; it will collapse completely in 2 days.

Where are the anarchists in Europe? Europe is in a malaise that ain't going anywhere.
Actually most of Europe is doing fine. The only countries who are in trouble are the ones with no industry to speak of. Not a single north European country is in a malaise. So stop your constant Europe bashing.
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Old 04-29-2012, 08:12 AM
 
692 posts, read 1,351,091 times
Reputation: 455
Quote:
Originally Posted by MTAtech View Post
The UK is a good example. You discuss above what got them in the crisis. That doesn't explain why they are still heading in the wrong direction.

This is from Britain’s Office of National Statistics (pdf):



When David Cameron became PM, he bought completely into austerity as a solution.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s, which combated the Depression with expansion instead of austerity.

I did discuss why we were heading in the same direction - Britain's economy is heavily reliant on Europe, and even though we are not part of the Eurozone we are not immune from the wider effects of the Eurozone crisis.

On a more positive note, some economists think the figures regarding Britain are too pessimistic and that the facts the markets are backing Britain allows for some optimism.

uk-double-dip-recession-what the economists think

In terms of the 1930's Depression we were never effected to the same extent as the US, and it should be noted that the IMF is backing Britain's attempts to cut spending. As I have already said there is no alternative to cuts which ever party comes in to power, it's more a question of how much do we cut by and over what time scale.

Britain is in too much debt to start borrowing more money to expand the economy. Indeed borrowing more money would just cause the pound to devalue and inflation to increase, as well as effecting our credit rating.

Brtain has been on the verge of bankruptcy only twice in recent times, once after World War 2, which can only be expected and once in the 1970's when Governments tried to expand the economy through Keynesian economics and printing money, the net result was massive inflation, and even worse stagflation with growing unemplyment to boot.

Britain's economy is currently at least stable, and unemployment is not as high as in many European Countries, and personally I think we are taking the right course of action. Trying to buy your way out of recession can lead to all kinds of problems.










Last edited by Mulhall; 04-29-2012 at 08:38 AM..
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Old 04-29-2012, 08:15 AM
 
Location: West Coast of Europe
25,915 posts, read 24,585,383 times
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Quote:
Originally Posted by Motion View Post
I thought his emphases on the eurozone countries having this one-size-fits-all solution to their problems was worth noting. I guess this is one of the big shortcomings with having all these countries connected to a common currency. Seems like it would be better if each country could sort out their own solutions to the recession. Countries like Poland who aren't in the EU seem to be doing better.
Poland has been in the EU for 8 years now, but they don't use the Euro.
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Old 04-29-2012, 08:19 AM
 
Location: Tampa Florida
22,230 posts, read 17,786,426 times
Reputation: 4585
Quote:
Originally Posted by itsjustmeagain View Post
Actually most of Europe is doing fine. The only countries who are in trouble are the ones with no industry to speak of. Not a single north European country is in a malaise. So stop your constant Europe bashing.
You are kidding, right? That is a sarcasm emoticon, isn't it?
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