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How did the US housing bust cause Greece to collapse ?
Because the world's economies are intertwined - just as they were even back in 1929. Greece was simply the most vulnerable of the countries in Europe so it suffered the biggest collapse.
Because the world's economies are intertwined - just as they were even back in 1929. Greece was simply the most vulnerable of the countries in Europe so it suffered the biggest collapse.
Ken
How are you connecting the Greek collapse to the subprime mortgage collapse here in the US ?
The Greeks were spending more than they took in in revenue for years before this happened.
Greece is in their 5th year of collapse, their 3rd IMF bailout and another set of austerity measures.
And nothing has worked.
Again, I am (and the whole thread is) talking about Europe as whole, but Greece collapsed in 2008 just like everyone else. In 2001-2007 their GDP grew over +4% on average, but in 2008 is was - 4 % (8% negative drop). Now, THAT'S a collapse.
Austria, Germany, and the Netherlands are in good shape, all in the 5 pct. range, but Spain and Greece are both over 25%. France is at 10.7 pct.
Unemployment among those under 25 is at 23.9 percent across the EU, and there is talk of a 'lost generation.' A spokesman for the European Commision announced a "new scheme" to ensure that recent grads would get job offers. Details not available, but I don't see what it could be other than a make-program of some sort. In other words, more big government in order to cure problems created by big government.
Update: the global economy was tanked by the housing bubble. Of course, it could be argued that deregulating Wall St to allow them to build that bubble was government policy. Yep. The old "tax cuts/trickle-down/deregulation (let the markets decide)" voodoo economics really came home to roost this time. It's not just the USA suffering.
Quote:
That's just like an alkie taking a drink in an effort to cure his alcoholism.
Spain and Greece are the countries with those severe austerity measures in place.
Update: the global economy was tanked by the housing bubble. Of course, it could be argued that deregulating Wall St to allow them to build that bubble was government policy. Yep. The old "tax cuts/trickle-down/deregulation (let the markets decide)" voodoo economics really came home to roost this time. It's not just the USA suffering.
Spain and Greece are the countries with those severe austerity measures in place.
Don't seem to be working all that well.
Because they waited until it was way too late. They've got huge chunks of their populations that aren't accustomed to having to work or worry about earning a living. They let their debt get too high before trying to bring it down.
Austerity is just something that's happening to them because they were very irresponsible earlier.
But -- really what do they have to worry about? Our immigration enforcement is very lax, they can just do what others do when they allow their own countries to fail --- just come on to the USA and we'll provide very nicely for them.
It's good to use EU for comparison. Both continents are in recession due to the US economic collapse, but our approach to fixing it was different. We used the classic approach, which US has always employed, which is stimulus spending, and Europe opted for austerity. Our unemployment is down from 10% to 7.9%, while in EU the situation is getting worse.
Devil's in the details here. Our 'decline' to 7.9% would appear to be largely due to a decline in labor force participation.
[Sept 27,2012]Hiring has barely been strong enough to keep up with population growth, and that's why the unemployment rate is still stuck at 8.1%.
A survey of households shows the U.S. population has grown 3.8% since Obama entered office, but jobs have only grown by 1.5% over that same time period.
Explain to me how the so-called "stimulus" worked to reduce the LFP rate??
Austria, Germany, and the Netherlands are in good shape, all in the 5 pct. range, but Spain and Greece are both over 25%. France is at 10.7 pct.
Unemployment among those under 25 is at 23.9 percent across the EU, and there is talk of a 'lost generation.' A spokesman for the European Commision announced a "new scheme" to ensure that recent grads would get job offers. Details not available, but I don't see what it could be other than a make-program of some sort. In other words, more big government in order to cure problems created by big government. That's just like an alkie taking a drink in an effort to cure his alcoholism.
The irony of your post is that countries like Germany, Great Britain, Austria, Spain and others are following that cut government spending.
Update: the global economy was tanked by the housing bubble. Of course, it could be argued that deregulating Wall St to allow them to build that bubble was government policy. Yep. The old "tax cuts/trickle-down/deregulation (let the markets decide)" voodoo economics really came home to roost this time. It's not just the USA suffering.
Spain and Greece are the countries with those severe austerity measures in place.
Don't seem to be working all that well.
Add Great Britain, Austria, Italy, and Germany to that list. All have austerity programs in place and they are all going through recessions.
Austria, Germany, and the Netherlands are in good shape, all in the 5 pct. range, but Spain and Greece are both over 25%. France is at 10.7 pct.
Unemployment among those under 25 is at 23.9 percent across the EU, and there is talk of a 'lost generation.' A spokesman for the European Commision announced a "new scheme" to ensure that recent grads would get job offers. Details not available, but I don't see what it could be other than a make-program of some sort. In other words, more big government in order to cure problems created by big government. That's just like an alkie taking a drink in an effort to cure his alcoholism.
Considering Europe's population is ~750-800 million people, that's a LOT of unemploymed people.
I may not be as smart as Paul Krugman or even Barack Obama (though I do know the correct use of 'beg the question') but I just look at some of these numbers. Even before the crash Europe had higher unemployment than the US. During the 90's and thru 2007, they were in the 8-10 pct range while we were 4-6%.
And then even within the US, there's another obvious trend. Liberal-controlled states like CA, NY, and IL are economic basket cases (10.1, 8.7, 8.8 unemployment, respectively). While at the low end of 'states by unemployment' we find a disproportionate number of red states, such as Nebraska (3.8), Utah and Wyoming (both 5.2). Unemployment Rates for States
Somewhere along the line a bell is going off--ding,ding,ding--small government=small unemployment. Big gov't=big unemployment.
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European Unemployment at record high 11.7%
