Discussion in 'Economics & Trade' started by Brett Nortje, Jan 21, 2018.
so you want the state to tax and spend a lot??? Isn't that what all libcommies want?
Nice suggestion, but a bit trite. Only a fool would think everybody else is one but them.
The number of variables in any given investment are multiple - some evident, some not so evident.
Recourse to somebody who is responsible for a large finance entity helps but is rarely sufficient. But, in this day and age, who can you trust for valid information? (Why is Fake News so repetitively an appellation for what we see/hear on TV?)
Which is why an old adage regarding "how to invest" comes to mind. There are numerous variations on the theme, and this one seems best to me: 10 Timeless Rules For Investors - excerpt:
Spot on. But dangerous to say to an American readership.
We think "government should be small", so we all can be Big (financially). So, "taxation must be small so we can all have more". (Or some such mind-boggling nonsense.)
In Europe, the reverse tends to be true*, which is why taxation per capita is much higher than in the US.
But, there are take-aways that need consideration. And a Free (or nearly free) National Health Care system as well as Tertiary Education are two indisputably lower-cost take-aways than in the US. I maintain that Europe has proven that point ...
*Probably due to the fact that monarchies ran countries for such a long, long time in Europe?
Yes, while we do not have accounts records from the European monarchies, we do see trickle down knock on effects in the state of their economies and currency worth's.
Unfortunately, due to world war two, there is still a relay effect from that time to today. Germany and Britain, two of the countries that should have been conversely affected, have surged to the top, of course.
That "relay effect", I suggest, is due to the fact that the EU-countries had far too much faith in the Euro. Moreover, when the Great Recession was imported from the US, with the rise in unemployment in Europe, politicos responded traditionally. That is, with more government financing of projects to keep people at work.
StimulusSpending, per se, is not a bad thing if it can get a country past a recession. But, Europe's problem was that the Euro interest-rates had skyrocketed, and the more money they borrowed (to spend on maintaining Demand) the further in debt they got.
Which means they passed decisively the Maastricht Treaty limit of "no-debt beyond 3% of GDP". And they did it willingly expecting the EU to maintain Euro Hi-debt. Which means "somebody has got to pay the interest" on Euro-notes that the Central Bank issues to countries in order to balance its books. (And the ECB loans to countries the money necessary to meet budgets.)
So, when this went on and on and on too far, the Germans simply blue the whistle. Because it was THEIR National Budget that was loaning money to the ECB (that was loaning funds to the countries).
It couldn't go on forever, and it didn't. France, a country that has a sound economy, is still having a problem finding the funding to both maintain government spending AND keep debt below the 3% of GDP limit.
As for Greece, forget it. But even if Italy has problems constraining its budget. And if Berlusconi wins the upcoming election all bets are off. That joker will break the bank with ginormous spending just to keep himself running the country. (He's whacko ...)
Europe was the old world long before the common currency. it’s economy is too socialist and suffers from what even Krugman calls Eurosclerous. Did it not rake in huge tourist revenue from being a old world theme park it’s standard of living would be even far lower than it is now. France for example has the per capita income of Arkansas about her poorest state.
I think I have a solution. If say Greece owes Italy money, and Italy owes Greece money, annihilating the debts would cancel out the debts. Unless they can use debt owed to them as surety, then debt is useless except for getting money back into the country slowly.
Everybody, you say, owes Germany? If Germany was to cancel all the debts that are owed to them, they could 'take up barter capital' in assets owned by those governments. These could be perishables like food, where, the glut of the order, for the sake of welfare in Germany, could feed the destitute before they are useless. Then, there is the money that they own, useless by many standards,so why is it worth something to Germany? If the money they owned was worth something, then it would buy Euros.
If they were to pay them back with Euros, then the Germans would see the Euro go down in value, as there would be shortage yet surplus, where the money would be annihilated and merely used to pay back loans to Germany, and, of course, this would make less Euros, making the value go up, but nobody would be using and trading Euros would they?
Borrowing money to invest is natural. It is time to make good on those investments, and, repay Germany. If they were to sell off a highway to Germany, it remains in use in Greece, collecting millions in capital for investments, and, leaving a nice investment for Germany, of course. If they were to say sell the old to Germany, the gold would shore up the Euro, and, that would mean they could all use the money, of course.
meandering rant if you know what your point is why not share it with us?
I tried to...
notice thread has no title either!!! issue in economics is capitalism versus socialism. that is issue in economics.
Separate names with a comma.