Germany is Europe's Economic Throttle

Discussion in 'Western Europe' started by LafayetteBis, Nov 29, 2019.

  1. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Most importantly, Germany is not beset by acute problems of Government Debt.

    By law, it cannot get its total Debt more than 3% of its GDP - which was a key element of the EU-treaty that established the Euro and of course was insisted upon by Germany. (So, it should have applied to the rest of Europe as well. But it did not apply! Because EU national government would not agree on it!)

    From here:
    But, in Europe, such outcomes are presently very rare. Germany has a mlaw-based fixed "debt-break". Other countries (of the more southern kind) should learn how to employ one.

    Whyzzat?

    Here's why:
    *It was Uncle Sam's Great Recession that was exported to Europe (in 2008 ). When a recession hits, tax-revenues (of all kinds) shrink as well. And they do so precisely at the moment that they should not because recessions mean layoffs, which in turn means contracted Demand (for goods&services) upon the principal Market-economy suppliers (ie. businesses).
    *Which in turn reduce employment. (It is a self-sustaining negative cycle.)
    *It is at such times that economies should be boosted by Government Expenditure to "stop-the-slop" from getting worse economically.
    *But for southern Europe countries (Portugal, France, Italy, Greece) that had created additional-debt it order to expand economies, that the "debt-overhang" became punishing. *They did not have the financial means to "expand spending" (which their economies needed badly) because they were already making substantial debt-repayments to lenders!

    It's a shame that Europe "had to learn the hard-way". It has been a salutary lesson, but costed many families economic-harm due to protracted unemployment.

    The good news is that Europe is finally crawling-out of the economic contraction. But, the pace is extraordinarily slow, slow, and slower ...

    MY POINT?
    *This mic-mac amongst countries over government expenditures has to stop. The "EU" cannot develop as it should. That is, it has a parliament, but now it needs an elected Managing Director (Chief Executive).
    *As much as the new Head of the EU Commission in Brussels is a delightful and intelligent lady, the EU needs an Elected Executive.
    *Not one "contrived" by the powers-that-be in Brussels.
     
    Last edited: Nov 29, 2019
  2. william kurps

    william kurps Banned

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    About time you make a sensible thread/post

    I really wish we had more German style unions in the USA, where the unions work with the companies.. not the type of unions we have today where the Unions dont care about the companies if they make good products or not.
     
  3. Diablo

    Diablo Well-Known Member

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    Get rid of the Euro, then the DM appreciates 30% and the other countries can be competitive. Single currency doesn't work without fiscal convergence/unity.
     
  4. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Can't get rid of the Euro, and it is unnecessary. The major competitors are denominated in Japanese Yen and American dollars. Like it or not.

    The uniformity of the Euro across Europe gives European companies far more of a chance of competing successfully in foreign markets - even that of the US ... !
     
  5. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Error. should read:
     
    Last edited: Nov 29, 2019
  6. Boosewell

    Boosewell Active Member

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    Germany's problem is that 50% of its GDP is reliant on exports. By comparison it is only 30% for the UK and a mere 12% for the US.

    So the good news is that the Germans have an economy to be proud of. The bad news is that they don't have a lot of choice.
     
  7. gnoib

    gnoib Well-Known Member

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    Germany has a industrial economy and not a consumer economy.
    The law prevents Germany to have a deficit, only when extraordinary circumfence require a deficit it can be use. 3% is the max.
    Everybody feared that Germany would go into a recession. So everybody demanded deficit spending, to stop it. Both are not going to happen and the Finance Minister and the Government had it right.
    The surplus over the last 10 years is so huge, that they have a back log of over 15 billions in spending.
    Its not just the Feds, the communities and States have the balanced budget law.
    Very few are not making it, but the majority does.

    They are sitting on a gigantic amount of money
     
  8. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Nor does the rest of Europe, which was the reason for the Common Market since the 1950s. That reason ("one common market and no trade barriers") has done the body very well indeed, building a country (and market-economy) that is larger than that of the US population-wise. In terms of GDP, the EU should be doing better, but let's not complain for Uncle Sam having pushed the SubPrime Mess onto the rest-of-the-world and acutely reducing economic activity and sparking an explosion of tremendously high unemployment levels.

    History is history, but it is something from which we should learn. Instead of bungling over any economic misfortune that happens to come our way in and around the EU.

    We in the EU deserve better economic management, and centrally from the Brussels Commission. This unelected body from God-knows-where with a brand-new Fearless Leader ...

    PS: What happened in Europe was threefold:
    *First there was the importation of the SubPrime Mess (and its economic contraction) by the rest of the world of Uncle Sam's Great Recession.
    *Secondly was the coming apart of the Middle-east and Africa in the south prompting the massive movement of human beings trying to get into the EU.
    *And its Central Government (in the European Commission) having bungled badly - because it forced the EU to behave like a bickering aggregation of small-states and not One United State.
     
    Last edited: Nov 30, 2019
  9. gnoib

    gnoib Well-Known Member

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    It was the EU, which saved countries like Ireland, Portugal and Spain from going belli up.
    Without the solidarity of the EU countries the PIGs would have been down the drain.
    Same for Greece and now Italy.
     
  10. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Agreement here. But, the Germans cannot do this forever.

    Things must change. Let's hope they do.

    I, frankly, have great faith that the EU's low annual cost of a Post-secondary Education will make the difference. That is, it will move far more people up the skills ladder.

    Because that is the way the developed world is changing. Like it or not, the developed-country economies are becoming almost all purely Services Industries ...
     
  11. gnoib

    gnoib Well-Known Member

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    It is not just Germany, France, UK, Dutch, Belgium, they all pitched in.

    Don't underestimate first class blue colour education
     
    Last edited: Nov 30, 2019
  12. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    For those who claim "manufacturing isn't really that important anymore" in today's economy, this should prove them wrong.
     
    Last edited: Nov 30, 2019
  13. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    Last edited: Nov 30, 2019
  14. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    From here: European Convergence Criteria
    And here: Debt clocks of the EU Member States - excerpt (as of today's reading, 01/12/2019):
     
  15. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    COMPARATIVE TERTIARY-LEVEL DEGREE ATTAINMENT

    I'm not sure what you mean by "blue collar" education. Perhaps secondary-education?

    I find that tertiary-level education is more important given our evolution from the Industrial to the Information Age.

    Graduation from a post-secondary education in the EU has been generally lesser than that of the US. (See here: Countries by level of Tertiary Education.)

    Excerpt from the listing at above linked site:
    Of course, the above is just a snapshot. Americans after WW2 went heavily for a post-secondary education, whilst Europe was still rebuilding itself. We are now 68 years beyond 1945 (when the war ended) - but I don't think the above results are exactly comparable.

    The above results still carry people in Europe who did not attain a postsecondary degree after the war but are still alive. Note also that the average lifespan in the US is four years less than that of the Europe. So, I doubt there will be any real homogeneity between the two statistics (EU & US) for another 5/7 years.

    PS: Note also that postsecondary education in the EU is largely very-low-cost, which is not the case in the US where a state-school post-secondary degree still costs about $14K a school-year. Which gives rise to America's largest private-debt mountain due to the necessary financing.
     
    Last edited: Dec 1, 2019
  16. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    Did it ever occur to you that tertiary level degree attainment might have more to do with the wealth in society, as a cause rather than an effect? (wealthier societies and fewer poor people have more resources to spend on degree attainment)
    And perhaps it also displays a level of discipline and work ethic?

    As they say, correlation does not automatically imply any particular direction of causation.

    And Germany also has very good apprenticeship programs, with partnerships in private industry. Did you consider that?
     
    Last edited: Dec 1, 2019
  17. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    If the US can obtain a level of more than forty-percent with an extremely high-cost postsecondary education, then Europe should be able to do it faster with government-funded student-grants.

    It is not just a "nice-thing-to-do". Given the change-of-ages that is upon us, tertiary-level education has become an absolute necessity.

    No doubt, you bring up very important factors that bear attention. But the problem with China's really new-fortunes is that most of it went to a comparatively select-few. A large number of which have bought very expensive properties in both Vancouver and the west-side of the US. And I do hear the occasional story about the Chinese who left almost completely their manufacturing capability in China to set-up-shop in the boonies of America where the entire family lives. Like relatively low manpower-cost West Virginia.

    This can only be goodness for the US, but I don't see these companies as Saviour-Enterprises in America's future.The Chinese offspring of those who started coming in the 1970s/80s have now all university degrees and their average-salary is about 20/40% higher than the median American salary. Meaning the parental work-ethic has shown its worth in the first-generation offspring. However, whether it can do the same for the children of these Chinese-children remains yet to be seen.

    Yes, its apprenticeship program is amongst the best here in Europe. But, I know a number of people - who benefitted from that program postwar - who have given-up on Germany since it opened up to East Germany. That enlarged considerably the German work-market. But many decided that rather-than-compete to leave for other parts of Europe with lower manpower costs. Many, in fact, brought their factories with them, and now produce elsewhere for export into Germany.

    It is the "lack of foresight" that has allowed the US to get into the mess sparked by the Great Recession. Uncle Sam had no forceful national oversight of what was happening in the realty and banking markets. Because the Replicants do not like such constraining "market oversight".

    Yes, unemployment is back to "normal", but I insist on the fact that such a "normal" is not going to last. It is just lock-step recovery in Demand that was killed in the 2008/9 Recession. The economy is now a decade hence, and that seems an appropriate distance-in-the-future for "other newer things to happen in Uncle Sam's Market-economy".

    What "things"? Frankly I don't know - but there are some sectors that are already pointing their collective-noses into the future. Time will tell.

    People are still being laid-off in the US because the Manufacturing Industry is winging-away to the Far-East (or Mexico, if need be) - and not China but to even cheaper labor-overhead southeast Asian countries. Who need the work far more so than China. And, as for China, let's hope that what is happening in Hong Kong is only a beginning.

    Hong Kong is a key central-point for financing mainland-China's corporate investments into foreign countries. Beijing does not really speak English. Anyone speaking only English who wants to find production-sources in China had best go first to Hong Kong ...
     
  18. gnoib

    gnoib Well-Known Member

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    I think you completely underestimate the quality of education of what you call apprenticeship, Lehre.
    The in-depth education it provides is just outstanding. In many countries, including US, this education would require 3 years college.
    That is what I call blue colour education.
     
  19. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    For the individual, or society? They are not the same. fallacy of composition

    Do you understand to what I am referring to?
     
    Last edited: Dec 1, 2019
  20. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    Fallacy or comprehension on your part.

    "The individual or society" - for what?

    Support your response with an explanation, not a question-mark ...
     
  21. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    No, not at all.

    As usual, you are employing hyperbole to respond ...
     
  22. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    Do you not understand that just because something benefits the individual, on an individual level, does not necessarily mean it's going to provide benefit to the society, or be a reason for society to support it?
    Helping more people win the race is not going to increase the prize money.

    I already explained this to you in previous threads, and did not want to derail your thread here again by having to go through it with you.

    To put it bluntly, the issue is whether an educational degree adds value in and of itself, or whether it simply diverts opportunity away from those who do not have such degree.

    I thought that would be obvious. But apparently being subtle was not good enough for you.
     
    Last edited: Dec 2, 2019
  23. LafayetteBis

    LafayetteBis Well-Known Member Past Donor

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    I don't know in what dense-force of a backward country you live in, but in mine government services are there to help sustain the individual. And because that service is uniform across the nation, then it is by taxation that such services are provided to the nation as a whole. You know, like the DoD that "defends the US" from its supposed enemies and wastes more than half the Discretionary Budget to seek out and destroy said enemies?

    Which is the sort of simplistic mind-thought very much in use in the Uncle Sam's country ...


    More one-liner simplistic nonsense. Of course, it does. We are talking about Healthcare and Higher Education on earth that are known to better one's life on earth.

    What planet do you live on?

    Well, ya go that correct!

    Moving right along ...
     
    Last edited: Dec 2, 2019
  24. william kurps

    william kurps Banned

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    [/QUOTE][/QUOTE]


    Uncle Sam defends france..


    Sooooo
     
  25. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    You understand that a government can't "sustain the individual" if the services they are providing provide no net benefit to the collection of individuals as a whole?
    That is the definition of the fallacy of composition. Something you're not seeming to grasp the concept of here.
     

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