Politics & Current Events
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Europe headed for recession
anyone think it has to do with all the austerity measures?
or am I just a silly Keynesian...
Re: Europe headed for recession
But really, what is the alternative here? Contine to spend money they don't have and can't hope to generate in the future on their own? And why should some countries give them money without expecting anything in return? By holding their feet to the fire like this and hopefully forcing them to enact long term changes, they're getting to the root cause of the problem instead of just sticking a bandaid on it so we can all take up this mess again in ten years when things are even worse.
The alternative is to stimulate the economy and then when things are better increase taxes, cut spending, etc. Politically hard to do, of course (although so was this), but you generate more taxes that way and people won't be as adversely affected by cuts in services.
<a href="http://www.thenest.com/?utm_source=ticker&utm_medium=HTML&utm_campaign=tickers" title="Home DDid you really think anything other than recession was going to happen?
Stimulate the economy with what money?
Where and how were they going to get this money?
The countries that are in trouble were always headed for a recession. This is a surprise for no one. The other countries like Germany are just trying to minimize the damage to their own economies and to exact concessions for long term reform in exchange for some help. It's going to be painful for a lot of people but we already knew it would be. Sometimes the only way out is through.
That was my thought - the UK at least has been in a recession since the housing market shat itself.
Yes, they were always going to go into recession. And because they are in the Euro, they need permission to get bailouts. That doesn't mean that Germany has no choice but to punish PIIGS right now. I think it's a bit short-sighted of them.
Honestly, I don't think Germany has as much of the moral high ground to stand on as they think they do. Greece should not have been allowed into the Euro - everyone knew that taxes were not really collected, there was a lot of corruption, no big growth industries, an aging population, etc. Greece couldn't meet the criteria to join the Euro in 1999. Did they really think these long term reforms had been fully enacted (and permanently, not just for show) in 2 years? There is plenty of blame for this mess to go around.
The ECB could print more money and inflate away the debt while working to spur growth. There isn't a finite amount of paper money in the world. Gold is another issue. At the end of the day the only way out is through growth. Taxing people who are making less money and laying off tons of government employees (especially when it's a big part of the economy) leads to fewer tax revenues, more need for social services and less consumption. How will these lead to growth or through anything?
Remember that most countries don't tax citizens who are not living there. So the really rich in Greece can just "reside" in Dubai and pay no income taxes in Dubai or in Greece. A lot of the people who would provide tax revenue have the means to get out of owing taxes.
Man Walks On Moon!
Yeah that's right my name's Yauch!