- Joined
- Aug 26, 2007
- Messages
- 50,241
- Reaction score
- 19,243
- Location
- San Antonio Texas
- Gender
- Female
- Political Leaning
- Conservative
I do have a clue, you and I disagree on the actions and results. Note I never attacked your intelligence for having a differing opinion, however you are forced to resort to attacking mine; ergo your position is weak and you cannot support it.LOL do you even understand what is going on?
The US Federal Reserve has been buying up assets from financial institutions and banks, many of them toxic, so that your banks could become some what healthy. On top of that Fannie and Freddie have been buying up toxic loans from banks further re-leaving them from bad debt (BOA just sold 76 billion dollars worth of toxic assets to Fannie for 500 million). Most of this did not add to the US debt, since the toxic **** the Feds were buying up from newly printed money was bad loans made to the people.
In the European equivalent, the ECB would be buying up state debt and writing it off basically. Not only would the banking sector get much needed cash infusion but also their balance sheets would loose the supposed bad debt. This means not only would the banks become healthy again but the national debt of countries would fall. The drawback is of course inflation, but considering that Eurozone inflation is 2 to 3% then adding a few more % is nothing and can be tackled later on when the markets are more rational plus of course it would give more time for the individual countries to fix their structural problems and get some growth into the economies.
So you have no clue about economics.. good to know.
Makes sense. There is no arguing that if the ECB decided to print it would helped tremendously. The question is, how do you further integrate the EU while still retaining the national sovereignty of it's countries? If you inflate Greek/Italian debt you devalue the currency of Germany and France.
How do you address this issue going forward when welfare states with lower productivity overspend the same currency of fiscally sound states with higher productivity?
If you want to think of the EU economy as a whole you would have to ignore sovereignty.
In 2010 (before the chaos of 2011), the EU27 GDP was €12.28 trillion and government debt was €9.82 trillion:
Debt/GDP of the more prominent countries were:
Greece: 143% with deficits of 10.5%
Italy: 119% with deficits of 4.6%
Belgium: 97% with deficits of 4.1%
Ireland: 96% with deficits of 32.4%
Portugal: 93% with deficits of 9.1%
Germany 83% with deficits of 3.3%
France: 82% with deficits of 7%
Spain: 60% with deficits of 9.2%
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-26042011-AP/EN/2-26042011-AP-EN.PDF
Of course this was before the chaos in the markets this year.
Why should the German people suffer inflation because Greece spent and borrowed like Paris Hilton on a bender?
I do have a clue, you and I disagree on the actions and results. Note I never attacked your intelligence for having a differing opinion, however you are forced to result to attacking mine; ergo your position is weak and you cannot support it.
:lol: Agreed. Our Fed has already opened up swap lines with the ECB to assist with liquidity. Let the EU tackle the problem of printing and deficits, there is no reason at all to involve our budgetary process when it is already such a mess.
Yes it does... Europe can solve its so called problems very easily, but Germany is against the method because of their historical issues with the method.
No, because those that CAUSED the problems are still in control over the economy, and those money junkies won't be happy until they've got ALL the money.
Austerity CANNOT work. It's not meant to work.
Oh, and it's only a matter of time before they start talking about American austerity.
In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided.
I would say, if anything, this is proof that an international fiat currency WOULDN'T work. The lesson learned from the EU failure is that you can't tie different countries with different cultures and economies into one monetary union. You will always end up having the rich countries bail out the poor ones and with relatively overpriced and under priced currencies.
And the 2011 numbers on debt wont change that much where as the deficits have come down across the board.
Newest updated numbers for 2010 are here.
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-21102011-AP/EN/2-21102011-AP-EN.PDF
And? Germany would LOVE a devalued Euro lol.. it is an export country! And you dont inflate the Greek debt.. you make it poof. As for the Italian debt, it is not a problem and never has been. The Italian economy is huge and even with a small growth in the economy then the debt ratio would fall.
That has to be addressed on an individual basis of course. Each country has specific problems, and it aint overspending per say or the welfare state system. Spain it is outdated labour laws.. the structural unemployment in Spain is 9+%... and that is a lot. Get rid of that and suddenly your unemployment is down to 13%.. still high but considerably better. Italy it is the closed professions that are the problem. Portugal it is red tape on pretty much everything. Greece as we all know it is the tax collecting system. The list goes on and differs from country to country.
Careful there... there is a difference between the EU and Eurozone. Yes in the Eurozone there would need to be put in place checks and balances so you cant go and have a 6% deficit and that would requiring ceding sovereignty, but that is the price to pay for having the Euro. But saying that, when there is a recession, then that rule has to be laxed... since cutting deep in a recession to keep within deficit targets is idiotic and counter productive as we basically see now in the Eurozone where growth has all but gone because of the idiotic idea of austerity because the markets are freaked over debt ratio numbers. The rules should promote surpluses or very small deficits during boom times and allow for larger deficits during recessions... that is how an economy should work.
Point is, with all the austerity in Europe these days the deficits will be going closer and closer to the neg 3% that is agreed on, with some countries already having primary surpluses and next year real surpluses (including Italy), DESPITE there being an economic cluster**** going on.
Also I dispute highly the Irish numbers... they guaranteed the debt in Irish banks.. which means all Irish banks debt need to be added to that number... taking them way past Greeces numbers.
When Papaconstantinou arrived here, last October, the Greek government had estimated its 2009 budget deficit at 3.7 percent. Two weeks later that number was revised upward to 12.5 percent and actually turned out to be nearly 14 percent. He was the man whose job it had been to figure out and explain to the world why. “The second day on the job I had to call a meeting to look at the budget,” he says. “I gathered everyone from the general accounting office, and we started this, like, discovery process.” Each day they discovered some incredible omission. A pension debt of a billion dollars every year somehow remained off the government’s books, where everyone pretended it did not exist, even though the government paid it; the hole in the pension plan for the self-employed was not the 300 million they had assumed but 1.1 billion euros; and so on. “At the end of each day I would say, ‘O.K., guys, is this all?’ And they would say ‘Yeah.’ The next morning there would be this little hand rising in the back of the room: ‘Actually, Minister, there’s this other 100-to-200-million-euro gap.’ ”
This went on for a week. Among other things turned up were a great number of off-the-books phony job-creation programs. “The Ministry of Agriculture had created an off-the-books unit employing 270 people to digitize the photographs of Greek public lands,” the finance minister tells me. “The trouble was that none of the 270 people had any experience with digital photography. The actual professions of these people were, like, hairdressers.”
By the final day of discovery, after the last little hand had gone up in the back of the room, a projected deficit of roughly 7 billion euros was actually more than 30 billion. The natural question—How is this possible?—is easily answered: until that moment, no one had bothered to count it all up. “We had no Congressional Budget Office,” explains the finance minister. “There was no independent statistical service.” The party in power simply gins up whatever numbers it likes, for its own purposes.
LOL the crisis in Europe is not something that poped up this year.. it started already in early 2010. This mostly made up crisis has been bleeding for almost 2 years now just because the politicians cant get their act together and the markets wanting instant results
Unless that inflation tops 10+%.. hell even 15+%, then a little inflation is not a problem and no one is suffering. In fact inflation can be good too..
Got to love this " let the euro sort out its own mess" attidue people have. Lets hope the Chinese people are in a more giving mood when the US economy needs to be bailed out.
By this definition,
austerity is the only way to go. Over-spending is what got them where they are.
I don't think Obama plans on getting seriously involved. That may be the obviously smart thing to do, or it may come back to bite us when our own problems climax, I have no idea.
Obama: Solving Euro Crisis of
Obama: Solving Euro Crisis of ‘Huge Importance’
Is this political suicide or just a pragmatic response? Can the US afford to get involved in the Eurozone disaster with a 100% Debt/GDP Ratio and annual deficits of 11% of GDP? Is Obama willing the save the Euro project he holds so dear at the expense of America's fiscal health? I'm looking forward to hear more details about this as it just broke but the headlines are already scaring me enough. I can't imagine Obama is willing to entangle himself in this mess so close to an election.
We already are helping them. We are providing record levels of currency swaps to the ECB. The fact that you would want to involve our budgetary process in the EU mess when we are running record spending levels, deficits, and unemployment rates is what is sad. And LOL, you seriously think the Chinese people would bailout the American taxpayer? They only buy our debt because we buy their goods. If you think China is even capable of, let alone willing to bail out the United States then you have lost it, mon.
EDIT: NY Fed: ECB Draws $552M Currency Swaps In 11/23 Week - WSJ.com
and if you America can sustain itself without the Euro and become an isolationist state then you have also "lost it man".
You're confusing so many things I don't even know where to start.
Got to love this " let the euro sort out its own mess" attidue people have. Lets hope the Chinese people are in a more giving mood when the US economy needs to be bailed out.
We been pumping foreign aid into Europe for 70 years. We still give foreign aid to Canada and Japan, so I don't want to hear crap about we, "don't help them". We've been helping them and they still haven't learned to help themselves.
There's no point in bailing them out, when we all know that they're just going to go back to the same policies that created the mess, causing another crash down the road.
Not completely... there are factors where over-spending IS an issue, and we'd have to examine each area, sorry, but I don't plan to write a thesis on all the various factors.
To put this into a simple perspective, let's say we're in a society of 4 people. 1 of us has a spending problem and can't make ends meet, 2 of us are responsible with our money, and 1 of us is living like a king on borrowed money, and not only is this person borrowing money, they are borrowing that money for gambling purposes. On top of that, this person is fixing their books so it appears as though they are in much better shape then they are.
Now, when the debt collectors come in asking for this ***t-ton of money that they owe. This person comes out and declares, well, since the other 3 helped lend money on expectation of a return, that this person has too much debt and if he goes bankrupt then EVERYONE loses money so they must foot the bill for this persons gambling debts and loans or else the entire "economy" would fail. So, being nice folk, the other 3 throw money in a bailout to 4, who then INSTANTLY takes the money and goes on a gambling binge and now comes back saying that he needs MORE MONEY (to fund further gambling)...
A better way to describe this setup is what is commonly called a "ponzi scheme"... and you, me, and most of the world are the victims in this scheme, and those individuals represented as number 4 in our little hypothetical society, they are the perpetrators of this scam, and well... the politicians meant to represent the people are signing us on as responsible for the "debts" of the one person who should be thrown in jail... actually, this scam is SO BIG that I would argue for capital punishment.
Edit : Your definition of austerity is actually reasonable... but the reality is that not only are services being cut, the cost for the remaining services are going up through taxes.
The ONLY outcome if this continues is that EVERYONE will become debt slaves.
same policies that created this mess, you mean Capatalism then? As for America your in the same situation has Europe you are in massive debt and your GDP is dropping, you have borrowed billions from the Chinese and recently nearly defaulted yourself. This mess was not just created by Europe so you can get off your high horse right now!
Got to love this " let the euro sort out its own mess" attidue people have. Lets hope the Chinese people are in a more giving mood when the US economy needs to be bailed out.
same policies that created this mess, you mean Capatalism then? As for America your in the same situation has Europe you are in massive debt and your GDP is dropping, you have borrowed billions from the Chinese and recently nearly defaulted yourself. This mess was not just created by Europe so you can get off your high horse right now!
I wish they would have taken that position long ago.
If you have any idea how things work you would know that we were nowhere near default. It was just the wailing of crybaby politicians.
but they didn't and now we have to deal with the consequences. This notion that we can simply choose not to bail out currencies and major countries has to stop, America has no choice they have to help bail out these european nations as do Germany, the UK and France. We sink or swim together now!
Sorry, I disagree. It's impossible to "bail out" this mess. Someone (a lot of someone's) are simply going to have to eat some large losses.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?